State and Federal Tax Credits for Employers

The Texas Workforce Commission

800-695-6895 or online at <www.texasworkforce.org/customers/bemp/bempsub3.html>

Work Opportunity Tax Credit (WOTC)

The WOTC reduces the federal tax liability of private-for profit employers if the employer hires from one or more of eight targeted groups. The employer could receive up to $2,400 per eligible worker.

Welfare-to-Work Tax Credit (WtW)

The WtW Tax Credit can earn employers up to $8,500 if an employee is a member of a family that meets one of three conditions as a Temporary Assistance for Needy Families (TANF) recipient.

State of Texas Refund for Employers of TANF or Medicaid Clients Tax Credits

Employers can receive a State Tax Refund if the employer, along with paying certain state taxes, pays wages to particular TANF or Medicaid recipients. TWC’s WOTC Unit administers this tax refund and provides employers with applications and information for WOTC/WtW certification.

Texas Comptroller of Public Accounts

800-252-1381 or online at <www.window.state.tx.us/taxinfo/taxpubs/tx98_673.html>

State Employer’s Child Care Tax Credit

The Employer’s Child Care Tax Credit is beneficial when an employer provides financially for its employees’ child care or donates to an institution for before- and after-school care.

Franchise Tax Credits – Jobs Creation and Investment Credits

To be eligible for a Jobs Creation Credit, an employer must first qualify as a business and create at least ten qualifying jobs. Investment Credits are available to employers who are engaged in specific business activities and are in certain geographic regions.

Internal Revenue Service

800-829-1040 or online at <http://www.irs.gov/publications/p15b/ar02.html#d0e2055>

45B Tax Credit for restaurant employers

Employers in the food and beverage industry can receive a tax credit for the Social Security and Medicare taxes paid by the employer on tips received by the employees as tip income. For more information, visit <www.restaurant.org/legal/law_fica.cfm> or visit the IRS Web site at www.irs.ustreas.gov/formspubs/index.html.

Dependent Care Assistance

This fringe benefit is for household and dependent care services that employers pay to employees under a dependent-care assistance program. The services must be for a qualifying person’s care and must allow the person to work for the employer providing the coverage.

Transportation (Commuting) Benefits

Transportation benefits apply in the case of:

1. Rides between employees’ homes and workplaces

2. Transit passes