If Mr. Smith works 300 hours at a wage of $10/hour, what is the total Work Opportunity Tax Credit (WOTC) available to his employer?

To determine the Work Opportunity Tax Credit (WOTC) available to Mr. Smith's employer based on his hours worked and wage, it’s important to understand how the WOTC is calculated. The WOTC is designed to encourage employers to hire individuals from certain target groups who face significant barriers to employment.

For 2023, the WOTC for hiring qualified individuals can vary based on the target group of the employee and the amount of hours they work. Generally, the tax credit is calculated as a percentage of the wages paid to the employee, up to certain limits.

In the scenario provided, Mr. Smith has worked 300 hours at a wage of $10 per hour, resulting in total earnings of $3,000. The WOTC can be up to $2,400 per employee for 120 hours of work under certain categories, with varying maximum credit limits for different groups.

In this case, since Mr. Smith worked more than 120 hours and if he qualifies for a tax credit of $2,400 (which is often applicable to eligible employees), the credit amount awarded to the employer is calculated based on 40% of the first $6,000 of wages for the targeted group hired.

However,