Find out if your business qualifies for the Work Opportunity Tax Credit (WOTC)

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Work Opportunity Tax Credit

Get rewarded for hiring disadvantaged workers!

If you hire certain targeted groups that have consistently faced significant barriers to employment, you can qualify for Work Opportunity Tax Credits (WOTCs), a federal tax program. The WOTC is a dollar-for-dollar tax credit of IRS taxes owed—not a percentage.

You can claim WOTCs until December 31, 2025. The program rewards you if you hire:

  • Qualified IV-A (Temporary Assistance for Needy Families) recipients
  • Qualified veterans
  • Ex-felons
  • Designated community residents
  • Vocational rehabilitation referrals
  • Summer youth employees
  • Supplemental Nutrition Assistance Program (SNAP) recipients
  • Supplemental Security Income (SSI) recipients
  • Long-Term Family Assistance recipients
  • Qualified Long-Term Unemployment recipients

Using geographic incentive credits, the federal government has designated certain economically depressed areas as tax advantage areas or Empowerment Zones. If your business is located in one of these areas and employs individuals living in the same area, it can earn credit against its federal tax liability.

Tax Team Article

What Business Owners Should Know About the Work Opportunity Tax Credit

Author: Heidi Henderson, Executive Vice President

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Heidi Henderson

Before you can claim the tax credit, you must apply for and receive a certification verifying your new hire is a member of a targeted group. After you receive the required certification, if you’re a taxable employer, you can claim the WOTC as a general business credit against your income taxes; if you’re a tax-exempt employer, you can claim the WOTC against your payroll taxes.

Applying for the WOTC can be tricky, so it helps if you work with an organization with prior experience successfully guiding companies through the application and certification process.

As the nation’s leading specialty tax firm, Engineered Tax Services has years of experience in helping clients claim the WOTC. Let us guide you through the bureaucratic labyrinth of applying for the Credit, so you can enjoy the full economic benefits of this very beneficial tax incentive!

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