California employers’ guide to the Work Opportunity Tax Credit (WOTC)
California employers can claim up to $9,600 per eligible hire through the Work Opportunity Tax Credit. This guide explains who qualifies, how to apply with eWOTC, and what forms you’ll need to secure the credit.
The Work Opportunity Tax Credit (WOTC) is a federal program that helps California employers reduce their tax liability while expanding job opportunities for people who face barriers to employment. For businesses across the state, the credit can be worth as much as $9,600 per eligible hire, making it one of the most valuable hiring incentives available.
By learning how the program works and following California’s application process, employers can turn smart hiring decisions into real financial savings.
Sources & References
The information in this guides comes directly from official government agencies responsible for disability-related tax rules and programs:
- IRS Publication 907 outlines how disability income, deductions, credits, and ABLE accounts are treated for federal tax purposes.
- U.S. Department of Labor provides details on the Work Opportunity Tax Credit (WOTC), including employer eligibility and filing requirements.
- California Employment Development Department (EDD) explains the eWOTC portal, certification process, and deadlines for California businesses.
- CalABLE offers account information, contribution limits, and management tools for California’s ABLE savings program.
These sources are updated regularly and provide the most reliable information available for California individuals, families, and employers.
What is the WOTC?
Federal tax credit overview
The WOTC is a federal income tax credit designed to encourage the hiring of individuals from groups that have historically experienced high unemployment. Employers who qualify can claim the credit against their federal income taxes, offsetting the costs of wages paid to new employees.
The exact credit amount depends on the wages paid to the employee and the number of hours they work, but it can reach up to $9,600 per qualified employee.
Target groups
The credit applies when employers hire individuals who are certified as belonging to a targeted group, which includes:
- People with disabilities (including those referred through vocational rehabilitation services)
- Long-term unemployed individuals
- Veterans (including those with service-connected disabilities)
- Recipients of Temporary Assistance for Needy Families (TANF) or Supplemental Nutrition Assistance Program (SNAP) benefits
- Certain other groups identified by the U.S. Department of Labor and the IRS
How to Apply in California
eWOTC system (online process)
California employers apply through the state’s eWOTC system, which allows you to submit a Request for Certification and track the status of your applications. Using eWOTC helps ensure faster processing compared to mailing forms.
Employer Services Online requirement for 25+ employees
If your company has 25 or more employees, you must first register with Employer Services Online before using eWOTC. Once registered, you can log in and complete the online certification process for new hires.
Paper option for 24 or fewer employees
Employers with 24 or fewer employees may still use eWOTC, but they also have the option to mail applications to the EDD’s Work Opportunity Tax Credit Authorization Center in Sacramento. Keep in mind that mailed applications take longer to process.
Deadlines: submit within 28 days of start date
To claim the credit, employers must submit the required forms within 28 days of the new employee’s start date. This deadline is strict—late submissions are not accepted.
Forms You’ll Need
Applying for the WOTC requires several federal forms in addition to California’s online or paper submission. Employers should be familiar with the following:
- IRS Form 8850 – Pre-Screening Notice and Certification Request. This form must be completed on or before the employee’s first day of work and submitted with your certification request.
- ETA Form 9061 – Individual Characteristics Form. This provides information about the new hire’s background to verify eligibility under one of the WOTC target groups.
- IRS Form 5884 – Work Opportunity Credit. Once certification is approved, this form is used to actually claim the tax credit on your federal income tax return.
Tips for Employers
- Keep detailed records. Maintain documentation for each new hire’s WOTC eligibility, including signed forms and any supporting materials. This ensures compliance if your claim is reviewed.
- Use the eWOTC portal. Submitting applications online not only speeds up processing but also allows you to track your certification status in real time.
- Plan for delays if mailing. If you choose to submit applications by mail (available only to employers with 24 or fewer employees), expect slower turnaround times compared to eWOTC.
Where to Get Help
The Employment Development Department (EDD) operates the WOTC Authorization Center to support California employers through the application process. You can reach representatives by:
- Phone – Call the EDD WOTC Center for assistance with applications or portal access.
- Fax or Email – Submit requested documentation electronically if additional information is required.
- Mail – Employment Development Department, Attn: Work Opportunity Tax Credit Authorization Center, 2901 50th Street, Sacramento, CA 95817.
For full contact details, including current phone numbers and email addresses, visit the official EDD WOTC Contact page.
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Dr. Jennifer Trimpey
Dr. Jennifer Trimpey
