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Work Opportunity Tax Credit (WOTC) for Maine Employers
Some of your new hires could earn your business a federal tax credit. We help you screen every new hire so you never miss one.
Work Opportunity Tax Credit
Hiring Can Come with a Tax Credit for Employers
40%
of qualified first year wages when the hire works 400 or more hours
25%
when the hire works 120 to 399 hours
0%
when the hire works fewer than 120 hours
Where WOTC stands today
Last reviewed: October 7, 2026.
How WOTC Works
Screen
Submit
Certify
Track
Claim
Keep records
Who May Qualify
A new hire may qualify if the state certifies them as a member of one of these ten groups. Each group has detailed rules, and isolved's screening handles the sorting.
Veterans
Veterans in a family receiving SNAP benefits, veterans out of work for four weeks or more, and veterans with a service connected disability.
TANF Recipients
People whose family received Temporary Assistance for Needy Families for any nine of the 18 months before hire.
Long-Term Family Assistance Recipients
People whose family received TANF for 18 months in a row, or lost it because of time limits within the past two years.
SNAP Recipients
Ages 18 to 39, in a family that received SNAP benefits for the six months before hire.
Ex-Felons
People hired within one year of a felony conviction or release from prison.
Designated Community Residents
Ages 18 to 39, living in an empowerment zone or rural renewal county. In Maine, that includes Aroostook and Piscataquis counties.
Vocational Rehabilitation Referrals
People with a disability referred by a state approved rehabilitation agency, a Ticket to Work employment network, or the VA.
Summer Youth Employees
Ages 16 or 17, working between May 1 and September 15, and living in an empowerment zone.
SSI Recipients
People who received Supplemental Security Income for any month ending in the 60 days before hire.
Long-Term Unemployed
People out of work for at least 27 consecutive weeks who collected unemployment for part of that time.
Relatives, dependents, majority owners, and former employees you rehire don’t qualify, even if they belong to a target group. Employees must work at least 120 hours for any credit.
FAQs: Work Opportunity Tax Credit
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A federal tax credit for employers who hire people from certain target groups that face barriers to employment, such as qualified veterans, SNAP recipients, and the long term unemployed. Each hire has to be certified by your State Workforce Agency, and the credit is based on the wages you pay them in their first year. Businesses of any size can claim it, and there’s no limit on the number of qualifying hires.
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For most target groups, it’s 40% of up to $6,000 in first-year wages when the hire works 400 or more hours, so up to $2,400. It’s 25% for 120 to 399 hours and nothing under 120 hours. Certain veterans can reach $9,600, and long-term family assistance recipients can reach $9,000 over two years. The credit reduces your federal income tax but won’t create a refund on its own, and unused credit can generally be carried back one year and forward up to 20 years.
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It covers people who started work on or before December 31, 2025, and Congress has not renewed it for later hires as of October 2026. Wages you pay in 2026 to a qualifying 2025 hire can still count, as long as they fall within that employee’s first year. Maine is still accepting applications for 2026 hires and holding them until Congress acts. WOTC has been renewed after earlier lapses, so we recommend continuing to screen every new hire.
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isolved’s fee is based on the number of new hires you have each year. Your payroll processor can walk you through what that looks like for your business.
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Very little. The new hire answers the WOTC questions during isolved onboarding, so there’s no separate form for you to chase, and the submission to your State Workforce Agency is handled for you. Your tax professional claims the credit on your return. Keep the certification letters with your tax records, since the IRS generally expects records supporting the credit to be kept for three years after the return is due or filed.
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Your payroll processor, at payroll@papertrails.com or 207.721.8575. They can tell you whether your new hires are being screened and help you get started if they aren’t.
Can’t find what you’re looking for? Contact our local team.
We’ll stay in the weeds to manage your payroll, Human Resources, and compliance needs.
