Q. My company is hiring workers who qualify for the new HIRE Act Social Security tax exemption. Can we claim the work opportunity credit for wages paid to the same workers? E.M.V., Baltimore
A. No. The Work Opportunity Tax Credit (WOTC) isn’t available if you claim the employment tax exemption for hiring previously unemployed workers. But you can elect to bypass the exemption in favor of the WOTC if it suits your needs.
For example, if you pay a worker $10,000 in 2010, you can save $620 in employment tax (6.2% of $10,000), but the WOTC for the same worker is generally $2,400 (40% of the first $6,000 in wages).
Tip: The HIRE ACT permits you to claim the special retention tax credit and the WOTC for the same worker.