The Work Opportunity Tax Credit (WOTC) is a Federal tax credit created as an incentive to employers to hire individuals from certain target groups that have consistently faced significant barriers to employment. The Consolidated Appropriation Act of 2021 extended the WOTC until December 31, 2025, giving employers additional time to make qualifying hires and claim the credit.
Clients and many taxpayers often wonder whether it might be beneficial in retirement or while still working to change their place of residency as a way to minimize their current and future state tax obligations, or as part of their long-term strategy to minimize estate taxes to a more tax-friendly state. While most states tax all or a portion of the income of their residents, certain states like Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming have no state income tax, and New Hampshire and Tennessee do not tax earned wages. These and other states may not have “state” estate and/or inheritance tax as well, making them very appealing for those looking to change their residency in the long-term.