What tax savings can an employer expect?

For certified hires in Target Groups 1 - 8 (except Group 6), the tax credit applies to the first year of employment only. Wage cap is first $6,000 of qualified wages. Maximum tax credit is $2,400 per new hire.

• Full credit calculated at 40 percent, up to $2,400
  • Requires employee to work 400 hours or more
• Partial credit calculated at 25 percent, up to $1,500
  • Requires employee to work at least 120 hours but less than 400 hours

For new subgroup Disabled Veteran (Group 2):

Wage cap is first $12,000 of qualified wages. Maximum tax credit is $4,800 per new hire.

• Full credit calculated at 40 percent, up to $4,800
  • Requires employee to work 400 hours or more
• Partial credit calculated at 25 percent, up to $3,000
  • Requires employee to work at least 120 hours but less than 400 hours

For Summer Youth (Group 6):

Tax credit applies to any 90-day employment period between May 1 and September 15. Wage cap is first $3,000 of qualified wages. Maximum tax credit is $1,200 per new hire.

• Full credit calculated at 40 percent, up to $1,200
  • Requires employee to work 400 hours or more
• Partial credit calculated at 25 percent, up to $750
  • Requires employee to work at least 120 hours but less than 400 hours

Note: If the employer continues to employ the individual beyond the 90-day period and the individual may meet the eligibility qualification in another target group, the employer may submit a new application during the first year of employment to claim the remainder balance of the one-year tax credit. If the target group is LTFA, the employer may qualify for a two-year credit.

For Long-term Family Assistance (LTFA) recipient (Group 9):

Tax credit applies to first two years of employment. Wage cap is first $10,000 of qualified wages in each year . Maximum tax credit over two years is $9,000 per new hire.

• First year of employment - maximum credit of $4,000
  • Full credit calculated at 40 percent, up to $4,000
    • Requires employee to work 400 hours or more
  • Partial credit calculated at 25 percent, up to $2,500
    • Requires employee to work at least 120 hours but less than 400 hours
• Second year of employment - maximum credit of $5,000
  • 50 percent of $10,000, up to $5,000

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