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Tax Credit Information
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The "Small Business and Work Opportunity Tax Act of 2007” reauthorized and extended the Work Opportunity Tax Credit (WOTC) through December 31, 2011.
The Work Opportunity Tax Credit (WOTC) is a federal income tax credit designed to help people gain on-the-job experience and acquire better employment. The WOTC program offers federal tax credits to employers as an incentive to hire people in several specific target groups.
TANF Recipients: a member of a family who has received or is receiving Temporary Assistance to Needy Families (TANF) or Aid to Families with Dependent Children AFDC) or a successor program. Employee must have received benefits for at least 9 of the last 18 months ending on the hiring date.
Veterans: a veteran AND a member of a family that has received food stamps for at least 3 months in the last 15 months ending on the hiring date. Disabled Veterans: a veteran who is entitled to compensation for a service-connected disability and has a hiring date not more than one year after discharge or release from active duty, or has been unemployed for a period or periods totaling at least six months during the one-year period ending on the date of hire.
Ex-Felons: convicted of a felony or released from prison for a felony within one year of the date of hire.
Designated Community Residents: an 18-39 year-old resident of a federally designated Enterprise Community (Northwoods Niijii – Lac du Flambeau, Mole Lake and Menominee Indian Reservations) or Renewal Community (Milwaukee). Credit is only for wages earned while the youth resides in the Enterprise or Renewal Community.
Vocational Rehabilitation Referrals: has a disability serious enough to be a barrier to employment AND is referred to an employer upon completion of or while receiving rehabilitation services under a State rehabilitation plan or a program approved by the Department of Veterans Affairs. Services must have been received no longer than 2 years before the Hire Date.
Summer Youth: a 16-17 year old resident of a federally designated Enterprise Community or Renewal Community . Credit is only for wages earned for up to 90 days between May 1 and September 15 AND while the youth resides in the Enterprise or Renewal Community.
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Food Stamp Recipients: 18-39 years old AND a member of a family that has received food stamps for the last 6 months or received food stamps for at least 3 of the last 5 months, but is no longer eligible to receive them.
Long-term Family Assistance Recipients (LTFA): an individual may be certified as an LTFA recipient if he/she is a member of a family that:
Received TANF payments for at least 18 consecutive months ending on the hiring date or;
Received such family assistance for a total of at least 18 months (whether or not consecutive) after August 5, 1997 if the individual is hired within two years after the date that the 18 month total is reached or;
Stopped being eligible for assistance after August 5, 1997 due to federal or state law limits and the individual is hired not more than two years after such eligibility for assistance ends.
Disconnected Youth
There are a number of tax credit programs that can help businesses reduce their Federal and State tax liability. The employer tax credit incentives can help businesses create jobs, boost local economies and help new employees obtain and retain jobs.
For more information visit the WOTC info page on the DWD website
Economic Development Tax Credit
The Economic Development Tax Credit provides tax incentives to new or expanding businesses whose projects will affect distressed areas.
The Economic Development Tax Credit replaces five former Wisconsin tax credit programs - the Airport Development Zone, Agricultural Development Zone, Community Development Zone, Enterprise Development Zone and Technology Zone programs. The new tax credit program eliminates all former zone boundaries, as well as creating new ways in which existing Wisconsin businesses or businesses relocating to Wisconsin can earn tax credits.
The tax credits, which are nonrefundable and nontransferable, must be applied against a certified business's Wisconsin income tax liability. In the case of an S-Corporation, LLC or other pass-through entity, tax credits flow through to the owners in the same way as the income. The tax credits have a 15-year carry forward.
Eligible Activities:
Job Creation – Tax credits can be earned through the creation of new, full-time positions that pay at least $10.88 per hour. Businesses must create the jobs within three years and maintain them for at least two additional years. Tax credits will be released on an annual basis, in direct proportion to the number of jobs created.
Capital investment – Tax credits may be earned through capital investment for property and equipment. Expenditures for working capital, employment costs, moving costs, intellectual property and unrelated fees and permits are not eligible. Tax credits will be released on an annual basis, as eligible expenditures take place. Businesses whose primary activity includes such things as retail, commercial development, recreation, entertainment or direct health care are not eligible to earn tax credits through capital investment.
Employee Training – Tax credits may be earned through many types of training provided to existing and new employees in full-time positions. Training must be related to a specific project. Eligible training costs include trainee wages, trainer costs and trainer materials. Tax credits will be released on an annual basis, as eligible training costs are incurred.
Corporate Headquarters – Tax credits may be earned by businesses locating global, national divisional or regional headquarters operations to Wisconsin or by businesses whose existing Wisconsin headquarters are at risk of leaving the state. Credits will be allocated on a per-job basis.
Allocation of Tax Credits
Commerce will certify applicants that have met the eligibility criteria and will allocate tax credits. In determining the allocation of tax credits, the Department will consider the following:
1. Whether the project will serve a public purpose;
2. Whether the project might not occur without the allocation of tax credits;
3. The extent to which the project will be financed with funds not provided by the State of Wisconsin;
4. Whether the project will displace workers in Wisconsin;
5. The extent to which the project will retain or increase employment in Wisconsin;
6. The extent to which the project will contribute to the economic growth of Wisconsin and to the well-being of Wisconsin residents;
7. Whether the project will be located in an economically distressed area;
8. Whether the project will be located in a rural area;
9. The extent to which the project will increase the geographic diversity of available tax benefits throughout Wisconsin;
10. The financial soundness of the business;
11. The ability of the business to utilize Wisconsin income tax credits; and
12. Any previous financial assistance that the business received from the Wisconsin Department of Commerce.
For additional information about the Economic Development Tax Credit program, contact Todd Jensen at 608/266-3074 or Todd.Jensen@Wisconsin.gov
The Wisconsin Economic Development Corporation (Formally the Wisconsin Department of Commerce) offers a variety of Special Tax Credit Programs that might affect your business. They manage a multiple tax credit programs that employers may wish to investigate for expansion and/or relocation.
For more information contact the Department of Commerce - Tax Credit Programs
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Brown County Job Center
701 Cherry Street
Green Bay, WI 54301
(920) 448-6760
TTY 920-448-6468
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