Work Opportunity Tax Credit
Nearly 25% of all U.S. employees qualify for Work Opportunity Tax Credits.
(For employers in the know, it’s money in the bank.)
Great news for employers: The Consolidated Appropriation Act has extended the Work Opportunity Tax Credit (WOTC) program through the end of 2025. The tax credits are significant, ranging from $2,400 to $9,600 per year, depending on worker category, number of hours worked, and wages earned.
Who qualifies?
WOTC is a tax incentive program available to employers who hire and retain people from groups who have had difficulty securing jobs.
These groups include:
Veterans
Recipients of “Temporary Assistance for Needy Families”
Food stamp recipients
Designated community residents
Ex-felons
Supplemental security income recipients
Long-term unemployment recipients
Summer youth employees
To read more about the 10 eligible groups, check out this page on the IRS website. For small business owners, the money can really add up. Assuming some of your new hires qualify for WOTC’s minimum tax credit amount of $2400, you can quickly see with this chart how your savings can add up.
New Hire x Tax Credits = Tax Savings Per Year
Start benefitting from WOTC today
To receive WOTC credits, you must obtain certification that an individual is a member of the targeted group and file Form 8850 with your state’s workforce agency within 28 days of your eligible employee beginning work.
Seeking certification while maintaining the timeline can be difficult to balance. However, with a workforce management solution, you can save time, avoid complicated manual reporting and take advantage of Work Opportunity Tax Credits.
Our WOTC partner has a recruiting and onboarding solution that allows your business to automatically ask prescreening questions to candidates or new hires. If the new hires are WOTC eligible, you’ll see the estimated tax credit value in their profile. In addition, you’ll be able to easily track applicants, set up hiring processes and manage employee onboarding.
Our partner’s onboarding solution automatically captures all the information needed to make sure you’ve filed within the deadline from an applicant’s hire date, as well as calculates your total credits earned and provides a report.
Whatever method you choose, we hope you pursue WOTC tax credits in the future. It’s not every day you can add thousands to your bottom line simply by gaining a new employee!
Find out if your business qualifies for Work Opportunity Tax Credits. Contact us now for a free analysis.
