Hiring? You Could Be Eligible for a $9,600 Tax Credit
If your business is hiring this year, don’t overlook the Work Opportunity Tax Credit (WOTC)—a valuable federal tax incentive that can help you reduce your tax bill by up to $9,600 per qualified hire.
What is the WOTC?
The WOTC is a federal income tax credit available to employers who hire individuals from certain “target groups” that face significant barriers to employment. This program benefits both your bottom line and the broader economy by encouraging inclusive hiring.
Who Qualifies?
The IRS defines a number of eligible target groups, including:
- Veterans (especially those with service-connected disabilities or long-term unemployment)
- SNAP (food stamp) recipients
- TANF recipients
- Ex-felons
- Vocational rehabilitation referrals
- Long-term unemployed individuals
- Summer youth hires in designated empowerment zones
The exact credit amount depends on the employee category, the number of hours worked, and wages earned in their first year.
| Target Group | Max Credit Amount |
|---|---|
| Qualified veterans | Up to $9,600 |
| SNAP recipients | Up to $2,400 |
| Long-term unemployed | Up to $2,400 |
| Ex-felons | Up to $2,400 |
| Summer youth (empowerment zones) | Up to $1,200 |
How to Claim the Credit
Timing is everything. To take advantage of the WOTC, employers must follow a specific certification process:
- Pre-screen applicants for eligibility (typically during onboarding).
- Submit IRS Form 8850 and ETA Form 9061 (or 9062) to your state workforce agency.
- Deadline: Forms must be submitted within 28 calendar days of the employee’s start date.
- Once certified, the credit is applied against your income tax liability.
Unfortunately, if the 28-day deadline is missed, the credit cannot be claimed. That’s why it’s crucial to make WOTC screening part of your new hire process.
How to Make It Easier
Many employers automate this process using their payroll provider or a WOTC service vendor. These tools can handle screening, submission, and tracking, helping you stay compliant and claim every eligible credit.
Final Thoughts
With hiring costs on the rise, the WOTC offers a meaningful way to save money while creating opportunities for those who need it most. If you’re planning to expand your team, don’t leave this credit on the table.
Need help navigating the forms or identifying qualified hires? Our team can help you set up a compliant process or coordinate with your payroll provider.
Want to talk WOTC with a tax expert? Let’s chat today.
📲 Call (402) 932-8815
Sincerely,
W. E. Stevens, PC
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