Tax Credits

The Advance Earned Income Tax Credit

Make sure your employees know about these tax credits! They may pay less in taxes and receive more money in their take-home pay-at no cost to you!

The AEITC is simply an offshoot of the EITC which provides eligible workers with portions of their tax credits in advance of filing their Federal income tax returns. These "advanced" credits result in larger paychecks throughout the year, yet still provides tax refunds after filing Federal income tax returns. Employees taking home larger paychecks are more likely to be able to cover day-to-day expenses and are less likely to miss work.

Work Opportunity Tax Credit (WOTC)and Welfare-to-Work Tax Credit (WtW)

These tax credits provide financial incentives to businesses for hiring individuals who qualify for tax credits.

Companies can earn up to a $2,400 federal tax credit per qualified individual hired through the WOTC program. For a business to receive the tax credit, an employee must be qualified in at least one of the following categories:
  • Recipient of Temporary Assistance to Needy Families, Food Stamps, or Supplemental Security Income (SSI)
  • Ex-felon
  • High-risk youth
  • Summer youth
  • Veteran receiving food stamps
  • Vocational rehabilitation referrals

The federal Welfare-to-Work Tax Credit program provides to businesses a tax credit of up to $8,500 over a two-year period for each newly hired (and qualifying) long-term family assistance recipient. The first-year maximum WtW credit is $3,500, and the second-year maximum credit is $5,000. There is no limit on the number of people a company can hire under either program.

Tax Credit for Manufacturing Apprenticeships

This tax credit is designed to encourage the development of skilled workers through apprentice training programs in order to counter the current and projected shortage of skilled craftworkers in the Manufacturing Trades which exists in Connecticut.

Some examples of crafts that are eligible for the Manufacturing Trades tax credit are: Machinist, Tool and Diemaker, Tool and Machine Setter, Plastic Technician, Injection Molding Technician, Moldmaker and in similar occupations which involve multiple work processes including the shaping of metals by machine tool equipment designed to perform cutting, grinding, milling, turning, drilling, boring, planing, hobbing, and abrading operations, and the set-up, operation, troubleshooting, repair, and maintenance of machinery used by the Manufacturing Industry.

Earned Income Tax Credit Purpose

To help low-income individuals meet expenses, the Federal government has established the EITC. Eligible workers may receive these tax credits in the form of larger tax refunds after filing their Federal income tax returns.