Final answer:
The WOTC allows employers to claim credits for hiring from certain groups, and employees see 6.2% deducted for Social Security and 1.45% for Medicare from their wages. Employers contribute a matching amount but often offset this cost by lowering wages. The exact WOTC credit percentage is not provided in the available information.
Step-by-step explanation:
The Work Opportunity Tax Credit (WOTC) is a federal tax credit available to employers for hiring individuals from certain groups that have consistently faced significant barriers to employment. The historical data indicates that employers can claim credits on a portion of the wages paid to qualifying employees.
When considering the payroll tax contributions, an employee sees 6.2% deducted from their paycheck for Social Security and 1.45% for Medicare. Employers theoretically pay an equal share; however, economists suggest that the employer's contribution is often offset by offering lower wages, implying that employees might bear the full burden of these taxes ultimately. Similarly, for independent contractors receiving a 1099 tax statement in the gig economy, they are responsible for both the employee and employer portions of the payroll tax.
While the WOTC percentage is not directly correlated to these deductions, it aims to incentivize the hiring of individuals who may otherwise face employment challenges, allowing employers to claim credits often proposed to reduce the employer's tax burden. Based on the WOTC guidelines, the correct answer to the student's initial question is not explicitly provided in the references given. To provide the exact percentage applicable to the WOTC, additional information regarding current tax law specifics would be needed.