Hiring Tax Incentives / WOTC

What is WOTC?

WOTC (Work Opportunity Tax Credit) is a Federal tax credit created by the Small Business Job Protection Act of 1996 and the Welfare-to-Work Tax Credit of 1996.  This credit is available to employers who hire and retain from target groups. Employers claim about $1 billion in tax credits each year under the WOTC program. There is no limit on the number of individuals an employer can hire to qualify to claim the tax credit, and there are a few simple steps to follow to apply for WOTC.

How Can Hiring Tax Incentives Help My Business?

Hiring Incentives have been a vital part of our country’s economy since the 1940s, when the G.I. bill was used to incentivize employers to hire the 15.7 million veterans returning from World War Two, and to save our country from an otherwise projected an unemployment rate of about 25 percent.  At that time, most Hiring Incentives were focused on Veterans returning to work after periods of service.  This continued to be the main focus for Hiring Incentives until the 1970’s and 1980’s when the focus was expanded to include Ex-Felons, and Welfare Recipients.

In the late 1990’s, “Job Creation” became the focus for Hiring Incentives and the Work Opportunity Tax Credit was created to help millions of Americans find jobs and give businesses tax incentives all while reducing the burden on government entitlement programs and saving U.S. taxpayers billions of dollars in the process.

What Type Of Hires Qualify For WOTC?

The Work Opportunity Tax Credit, is a federal tax credit available to employers who hire veterans and individuals from certain target groups who have faced substantial hardships and remain consistently underemployed. These groups include the following. 

• Unemployed Veterans and disabled veterans
• Temporary Assistance for Needy Families (TANF) Recipients
• Food Stamp (SNAP) Recipients
• Designated Community Residents (living in Empowerment Zones or Rural Renewal Counties)
• Vocational Rehabilitation Referred Individuals
• Supplemental Security Income Recipients
• Summer Youth Employees
• Qualified Long-Term Unemployment Recipient
• Ex-felons

Although the tax credit was set to expire in 2015, the PATH Act extended the Work Opportunity Tax Credit through December 31, 2019 and has been extended once again.

What Type of Business Can Benefit From WOTC?

Virtually any business can now benefit from Employer Based Tax Incentives because even candidates that don't qualify for the Work Opportunity Tax Credit often qualify for other tax incentives.

To get started, we’ll conduct an initial consultation to determine the potential benefit. This consultation allows our professionals to evaluate your status and recommend the best course of action to claim the tax credits that belong to you.