Work Opportunity Tax Credit (WOTC)

Incentivizing for closing the skills gap

The Work Opportunity Tax Credit, or WOTC, has been around for decades, yet remains an underutilized tax incentive. Most of the legwork to claim the credit needs to be done before the employee even starts working, and many employers don’t know the process.

Potentially thousands of dollars are going to waste in the meantime. With WOTC, you can claim 25% or 40% of first-year wages for new employees who meet certain criteria. In some cases, you can even claim WOTC for two years for the same employee.

Are you hiring a veteran? Someone who’s been unemployed long-term? An ex-felon? A summer youth employee? These are a few of the targeted groups who traditionally face a harder time finding work and whom may qualify for WOTC.

And even though you’ll need to take care of authorization before the employee is hired, you have up to three years to use the credit. WOTC doesn’t expire until at least December 31, 2025, giving your business plenty of time to recruit targeted new hires and save thousands of dollars in taxes in the process.

Target Groups Eligible for WOTC

• Qualified IV-A recipient
• Qualified veteran
• Ex-felon
• Empowerment Zone resident
• Certain disabled individuals
• Summer youth employee
• SNAP recipient
• Supplemental security income recipient
• Long-term family assistance recipient
• Qualified long-term unemployment recipient (new in 2020)

____________________________

A TAX CLIENT’S PERSPECTIVE…

“Excellent service. My advisor does a great job and is easy to work with.”

Lin Harris – Senior Care Services, Inc., Wichita, KS

____________________________