Did you know that tax credits are not just for big corporations? Many are designed to support small and mid-sized employers, especially in the staffing industry.
Companies with the right process and guidance in place can access tax credits. Partnering with an experienced tax credit processing and management firm can help.
Types of Businesses Eligible for the Work Opportunity Tax Credit
Most US businesses that hire from targeted groups facing barriers to employment qualify for the Work Opportunity Tax Credit (WOTC). Depending on the group and the number of hours worked, the tax credit ranges from $1,200 to $9,600 per eligible employee. Hiring from these groups helps offset business income taxes, increase workforce diversity, and reduce unemployment rates.
The WOTC requires hiring from the following groups that historically face barriers to employment
- Supplemental Nutrition Assistance Program (SNAP) recipients
- Veterans
- Long-term unemployed individuals
- Supplemental Security Income (SSI) recipients
- Ex-felons
- Summer youth employees
- Designated Community Residents (DCRs)
- Vocational rehabilitation referrals
- Temporary Assistance for Needy Families (TANF) recipients
How the Work Opportunity Tax Credit Benefits Employers
Employers financially benefit from the WOTC program in these ways:
- Tax incentives: Reducing a company’s federal tax liability improves the bottom line
- Employment costs: Tax credits lower hiring, onboarding, and training expenses
- Profitability: Enhanced cash flow increases operational flexibility and investments
The operational benefits of the WOTC include:
- Expanded hiring pool: Hiring individuals from historically marginalized groups strengthens workplace diversity and employment.
- Entry-level employees: Employers can find motivated new hires for lower-seniority roles.
- Retention rates: Employees who face barriers to employment typically remain long-term.
- Employment stability: Hiring long-term unemployed individuals helps improve community living conditions and economic growth.
- Brand loyalty: Socially responsible behavior enhances a company’s reputation and strengthens customer satisfaction.
Maximize Your Tax Credit Potential
Many small and mid-sized businesses are missing out on valuable tax credits simply because they haven’t found the right tax credit processing firm that works for companies of all sizes. At MJA & Associates, we specialize in helping staffing firms and employers uncover, process, and claim tax credits like the WOTC with confidence and ease.
Ready to see what your company might be missing? Reach out today to discover how much you could be saving, with no upfront costs and a team that works with you every step of the way.
