Business Owners: How the Work Opportunity Tax Credit Can Help You

Running a business is challenging, particularly when it comes to hiring the best workforce for your company. When selecting your employees, there is a lot of time and energy that goes into choosing the right candidate and it can be difficult to know when you’re making the right choice. The government recognizes what a challenge it is for business owners to narrow down their top choices, particularly when other social factors come into play – like supporting diversity and fostering equality. In an effort to facilitate diversity and access to good jobs for all Americans, the IRS has created the Work Opportunity Tax Credit (WOTC) as an incentive for business owners to expand their horizons when it comes to finding employees.

The Basics

The WOTC provides employers a tax credit for hiring people from certain targeted groups who have consistently faced significant barriers to finding gainful employment. These targeted groups include people who have been convicted of crimes, veterans, those who live in subsidized housing, or receive financial aid from the government, among others. Receiving the credit is fairly simple. Employers just need to show that their new hires qualify as a member of a targeted group. Once they have screened the candidate and hired them, employers need to submit the proper IRS and Department of Labor forms to its state workforce agency within 28 days from the date the employee was hired.

How Can It Help You?

Taking advantage of the WOTC is beneficial for employers in several ways. First, it can provide employers up to $9,600 in tax credits per eligible employee hired. Although the actual amount is limited to the type of business you run, how high your income tax liability is, and the type of work the employee does, you can apply whatever credit you do receive against such tax liabilities to help lighten your load. Further, fostering a diverse and inclusive environment for your employees is priceless, and knowing that you are making a difference by providing opportunities to those who struggle to find any can do wonders for company morale and its subsequent success.

Contact the Wilson Law Group today.

Running a business is tough, and making sure you are providing the best opportunity for all potential employees only adds more to your plate. At the Wilson Law Group, we regularly work with business owners to help facilitate beneficial professional relationships between veterans and other minority groups alike. If you have any questions about whether you can benefit from the Work Opportunity Tax Credit, please don’t hesitate to contact us at (804) 864-5268 today!

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Wilson Law Group

Jim Wilson is the founder and principal attorney of the Wilson Law Group. For the past 25 years he has been combining legal dexterity with an entrepreneurial mindset to help aspiring and established business owners start, finance, buy, sell, and run their companies.

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