The Work Opportunity and Welfare–to–Work Tax Credits: Participation Rates Among Eligible Workers

725 National Tax Journal Vol. LVI, No. 4 December 2003 Abstract This paper examines participation in the Work Opportunity Tax Credit (WOTC) and the Welfare–to–Work Tax Credit (WtW), two federal employer subsidy programs. I use nationally– representative data to estimate the number of disadvantaged workers whose employers qualified for either of the credits in 1997 or 1999. I compare these estimates to the number of applications approved in each year. Estimated participation in 1999 was less than 17 percent among eligible disadvantaged youth. While participation was higher for welfare recipients, even upper–bound esimates are less than 33 percent. These low participation rates are consistent with those of similar programs in previous years.