Business Tax Strategy
Tax · WOTC
The Work Opportunity Tax Credit —
You Are Already Hiring
The Work Opportunity Tax Credit pays employers for hiring people out of groups that have a harder time getting hired. You are already filling those roles. Most businesses never claim a dollar of it, either because nobody told them it existed or because the paperwork looked like more trouble than it was worth. It is a screening question on day one and a form after that.
Per qualifying hire, in federal credit
The ceiling depends on which group the new hire falls into and how many hours they work. Most categories land lower than the top number, but a company hiring steadily through the year can stack a meaningful figure without changing a single thing about how it hires.
Who counts as a qualifying hire
The list is set by law and includes, among others:
Veterans
Several sub-categories, including unemployed veterans and veterans with a service-connected disability. This group carries the highest credit amounts.
People receiving public assistance
SNAP recipients, long-term family assistance recipients, and Supplemental Security Income recipients.
The long-term unemployed
Someone who has been out of work for 27 weeks or more and drew unemployment during that stretch.
People coming out of the justice system
A hire within a year of a felony conviction or release.
Vocational rehabilitation referrals
Referred to you by a state rehabilitation agency, an employment network, or the VA.
Summer youth in an empowerment zone
A narrower category with its own rules, but real for seasonal employers.
The 28-day deadline that kills most claims
This is the whole ballgame. The screening form has to be filled out on or before the day you offer the job, and the certification request has to reach your state workforce agency within 28 days of the hire's start date. Miss that window and the credit is gone for that person, no matter how clearly they qualified. This is why WOTC belongs in your onboarding packet, not in your tax file.
How to actually run it
Screen every new hire, not some of them
You cannot tell who qualifies by looking. A short questionnaire that goes to everybody is the only version that works, and it keeps the process even-handed.
File the certification on time
The screening form plus the state request, inside 28 days. Most payroll systems and PEOs can automate this so nobody has to remember.
Track hours and wages
The credit is a percentage of qualifying wages and steps up once the employee crosses an hours threshold. If you do not track it, you cannot claim it.
Claim it on the return
It flows through the general business credit. Unused amounts can generally be carried back or forward, so a light year does not waste it.
We work alongside the people you already pay
We are not here to replace anybody. Most of this work runs through partnerships with the firms already touching your payroll and your return: payroll processors, PEOs, health benefits brokers, CPAs and tax strategists. Your payroll company keeps running payroll. Your CPA keeps filing. We handle the piece in the middle that neither one is paid to go find.
If you are one of those firms, the same door works the other way. We bring your clients a savings conversation you do not have to staff, and you stay in the loop the whole way.
See who we partner withPut the screening in your hiring process
Tell us how many people you hire in a year and who runs your payroll. We will show you where the screening drops in so it runs itself from then on.
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Sources
IRS.gov — Work Opportunity Tax Credit
Educational content only. Always consult a licensed CPA before implementing.