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Temporary Assistance for Needy Families (TANF)
or Medicaid State Tax Refund
How and When to File for State Tax Refund
By using Form TWC 1098, Application for Refund of Taxes Paid to the State
of Texas, an employer can apply for a tax refund for wages paid an employee
in a calendar year only on or after January 1 and before April 1 of the calendar
year following the year taxes and wages were paid.
For example, a refund request for wages paid in calendar year 2010 must be
submitted on or after January 1, 2011 but before April 1, 2011.
After the employer and employee complete TWC Form 1098 it is sent to:
Texas Workforce Commission
101 E. 15th Street, Room 332T
Austin, Texas 78778-0001
The Texas Workforce Commission certifies that the employee received TANF or
Medicaid benefits. Insurance coverage for the applicant must be provided by
the employer or a representative. Those applications meeting both the insurance
and TANF or Medicaid requirement are forwarded to the State Comptroller for
further verification and a refund, if eligible.
State of Texas Tax Refund for Employers of TANF or Medicaid Clients
An employer may qualify for a state tax refund if he/she:
- pays certain State of Texas taxes (franchise, state sales and use,
boat and boat motor, PUC gross receipts, inheritance, hotel and/or manufactured
- pays wages during the first year of employment to an employee who
is a Texas resident and received TANF or Medicaid benefits any month
within 6 months of the start date, and
- provides and pays for a part of the cost of qualifying major medical
insurance for the employee.
Employers can recover up to 20 percent of $10,000 in wages paid during
the first year of employment, which means a refund of up to $2,000
For more information about the Work Opportunity Tax Credit, or Temporary Assistance for Needy Families (TANF) or Medicaid State Tax Refund, please call the Texas Workforce Commission WOTC Unit at 1-800-695-6879.