Work Opportunity Tax Credit (WOTC)

Increase Your Cash Flow by Providing Pivotal Opportunities

The Work Opportunity Tax Credit program rewards employers for providing opportunities to people who face roadblocks to employment or live in communities where jobs are sparse. Learn how to maximize your tax savings when hiring people from targeted groups.

Are you missing out on tax savings you’ve earned?

What is the Work Opportunity Tax Credit (WOTC)?

The Work Opportunity Tax Credit (WOTC) is a federal tax credit program that incentivizes employers to hire individuals from targeted groups that often face barriers to employment. WOTC provides a dollar-for-dollar reduction of income tax liability —and there is no limit to the amount of credit you can claim. With this ongoing program, businesses can save up to $9,600 per certified new hire.

Benefits of Claiming WOTC:

Provide Invaluable Opportunities

Get rewarded for providing employment to people who may not have access to many job opportunities.

Reduce Tax Liability

Receive up to $9,600 of income tax credits for each certified employee.

Claim Unlimited Credits

Claim the WOTC credit for each certified employee that you hire—there is no limit.

WOTC Program Target Groups

To qualify for the Work Opportunity Tax Credit, a State Workforce Agency must certify the new hire as a member of a specific targeted group. Some of these targeted groups are:

  • Qualified veterans
  • Ex-felons
  • Designated community residents
  • Summer youth employees
  • Supplemental Security Income recipients
  • Qualified long-term unemployment recipients
  • Members of families receiving the Supplemental Nutrition Assistance Program
  • Members of families receiving Temporary Assistance for Needy Families

What Omega Provides

Omega Accounting Solutions provides expert tax credit services to businesses of all sizes, performing a comprehensive qualification analysis and delivering an accurate, compliant, and IRS-defensible report.
With 15+ years of experience and expertise on federal & state tax incentives, Omega uses a holistic perspective to evaluate your overall tax strategy and find untapped opportunities to maximize your benefits each year. We help small and medium-sized businesses (SMBs) access tax consulting services typically only available to large corporations.

How It Works:

Step 1: Discover If You Qualify

Complimentary discovery meeting with one of our tax credit experts to determine if the WOTC program may apply to your business

Step 2: Screen & Certify New Hires

Your company utilizes its job application pages to collect necessary candidate information with a Work Opportunity Tax Credit questionnaire while Omega certifies new hires through the State Workforce Agency

Step 3: Substantiation & Reporting

Omega calculates your WOTC credit amount and provides all necessary information to your CPA who applies the credits on your tax returns

Discover the Power of Modern Tax Strategies

EVALUATE YOUR SAVINGS POTENTIAL

Ready to start saving with Omega’s WOTC experts? Fill out the form to request a complimentary discovery meeting with our experienced team of professionals.

Work Opportunity Tax Credit Program FAQs

Can a business get tax credits for hiring people?

Yes! The WOTC rewards businesses throughout the United States for hiring qualified individuals. Contact us today to find out more.

How do businesses claim WOTC?

New hires must answer questions prior to receiving a job offer and then be certified with a State Workforce Agency within 4 weeks of hire. Omega’s web platform and back-office team screen and certify WOTC-eligible employees for businesses on a rolling basis.

How much money is WOTC worth?

Different categories of employees produce a different amount of credit; but, most often, the credit is $2,400 per certified new hire.

Who qualifies for WOTC?

Businesses that hire employees who live in a certain neighborhood or are unemployed for a given duration can qualify the business for WOTC. Some employees can also qualify as government aid recipients even if the recipient is a family member and not the actual employee. For a complete list of qualifiers, please reference IRS Form 8850.

Can a nonprofit claim WOTC?

Yes, nonprofits can use WOTC against payroll taxes, but only for the veteran categories at slightly reduced rates.

Can a PEO claim WOTC?

PEO clients generally get the income tax credit for their common law employees. PEO’s would claim the tax credit for their own common-law employees.

Can a staffing agency claim WOTC?

Yes, staffing agencies are typically regarded as the common law employer and thus would be eligible to claim WOTC.

Does claiming WOTC affect business income tax returns?

Yes, wage deductions must be offset by the amount of the income tax credit. Other tax credit calculations, such as the Credit for Increasing Research Activity, must be adjusted relative to the WOTC, which takes priority.

Are there limits on WOTC credits?

Yes, the Work Opportunity Tax Credit program is subject to the same General Business Credit Limitations as other credits like the R&D tax credit.