What is the WOTC program?

The Work Opportunity Tax Credit is a tax incentive program sponsored by the federal government. It is designed to improve the employment opportunities for certain people who are disadvantaged by allowing employers who hire them to receive tax credits.

Eligible hires include people receiving food stamps, people with a military background, and the long-term unemployed. There are 13 total groups within the WOTC program.

If you are a for-profit business, and you hire eligible people, then yes you can earn tax credits! Some non-profits are eligible as well. Contact us and we'll do a free assessment of your business.

There is a certification process that qualifies applicants, and a compliance process involved in determining the amount of credit accumulated for a specific hire. HireCredit handles all the screening, compliance paperwork, and credit calculations for you. Contact us to learn more.

No, it is allowed. The entire purpose of the WOTC program is to incentivize businesses to hire people in those circumstances. As an employer, you are protected against any discrimination claims when following the WOTC certification process properly. To learn more, read the Commission Opinion Letter: Federal Work Opportunity Tax Credit Form 8850 from the US Equal Employment Opportunity Commission.

The WOTC credit can be carried back one year, or forward for 20 years. So even if you don’t have a tax liability this year, it is likely you’ll be able to use the credit in the future.

While some companies do handle tax credit processing internally, most recognize that a third party that specializes in tax credits offers better performance and far less operational burden on their business, resulting in a greater net benefit from the program. Processing tax credits internally requires you to divert time and resources away from your core business. Additionally, an independent third party is more likely to get honest responses from applicants, further optimizing tax credit utilization.

Yes, the recently passed Families First Coronavirus Response Act (FFCRA) and The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) add new provisions to help companies with fewer than 500 employees combat the effects of COVID-19. We’ve highlighted some of these important provisions in a recent blog article here.