Tax Credit and Bonding

Work Opportunity Tax Credit Program

The Work Opportunity Tax Credit Program (WOTC) offers private for profit employers an opportunity to earn a federal income tax credit for hiring individuals from certain target groups. The program is also designed to help jobseekers who consistently have a particularly high unemployment rate, enter employment. By hiring individuals from these targeted groups, employers can reduce their taxes up to $2,400 or $4,800 during the first year of employment or up to $9,000 over two years, depending on the qualified applicant.

The targeted groups are: Qualified Temporary Assistance to Needy Families Recipients, Qualified Veterans/Disabled Veterans, Qualified Ex-felons, Designated Community Residents, Vocational Rehabilitation Referrals, Qualified Summer Youths, Qualified Food Stamp Recipients, Qualified Supplemental Security Income Recipients and Long-Term Family Assistance Recipients.

The American Recovery and Reinvestment Act of 2009 expand WOTC to include two new targeted groups: disconnected youth and unemployed veteran.

WOTC Online Resource Center

Federal Bonding Program

The Purpose of the Federal Bonding Program is:

  • To assist ex-offenders and other at-risk persons with questionable backgrounds secure jobs, which might be denied employment due to their previous personal or employment history.
  • To help protect employers from loss of money or property, due to dishonest actions of the potential employee.
  • The bonding program is a tool for marketing an applicant to prospective employers.

Bonding Program Benefits for the Employer:

  • Bond coverage is provided at no cost to the employer as an incentive to hire hard to place job applicants.
  • The bond coverage is in effect the day the new employee begins work with duration of six months.
  • The employer gets the worker’s skills and abilities without taking the risk of potential theft or dishonesty.
  • There are no documents to sign or paperwork to complete.
  • The bond has no deductible and reimburses the employer for any loss due to employee theft within the specified six-month period.

Who Qualifies for Bonding?
Individuals who are not commercially bondable due to past questionable behavior which casts doubt upon their credibility or honesty, or who have committed fraudulent or dishonest acts are eligible. This includes:

  • Ex-offenders, including anyone with a record of arrest, conviction or imprisonment.
  • Those with a poor financial credit history or who have declared bankruptcy.
  • Ex-addicts with history of alcohol or drug abuse.
  • Those who have been dishonorably discharged from the Armed Forces.
  • Persons lacking a work history from low-income families.

Job Requirements

  • The employer must have a specific date set for the applicant to begin work.
  • The applicant must be of legal working age.
  • The position will be one where the applicant will work at least 30 hours of steady work per week for period a of six months. Federal taxes must be automatically deducted from the check.
  • Ensure that the job is suitable for the applicant.
    Example: An individual convicted of drug abuse should not be placed where drugs are readily accessible like a pharmacy or hospital.
  • Self-employed and/or franchised individuals are not eligible.

Coverage Amounts

  • Bonds are issued in increments of $5,000 for a period of six months.
  • The maximum amount is $25,000.
  • $ 5000 is generally sufficient to cover most circumstances.
  • Coverage is based on the level potential or estimated risk to the employer for financial loss, which could result from dishonest acts by the individual while on the job (excluding vehicles).
  • Bonds in excess of $5000 should be limited to individuals who may steal/destroy more than $5,000 in money or property at one time. The employer should base a bond request in excess of $5,000 upon reasonable justification.

Bond Information

  • Bonds can be issued to any employer regardless of whether the company has or has not commercially purchased a Fidelity Bond.
  • Specific coverage includes theft, forgery, larceny or embezzlement. Bonds do not provide coverage for situations due to poor workmanship, job injuries or work accidents.
  • It is not a bail bond, court bond, contract bond, performance bond or license bond.
  • Bonds are not transferable from one employer to another.

Coverage Process
Visit any CareerSource Pasco Hernando Center or email to inquire about and/or apply for the bonding program.

  • Eligibility will be determined and employment information for a bona fide job offer will be verified, and a bond form completed by an employment counselor.
  • A letter will be sent to the employer confirming the bond. The letter includes the name of the job seeker for whom the bond is being issued, bond effective date, amount and period of coverage, etc. This letter confirms the bond in advance of receipt of the actual Fidelity Bond, which is mailed to the employer.

Click HERE for more info on the Federal Bonding Program