WOTC is a benefit to employers and employees
October 14, 2016
By Stacey May, Director of Tax Credits
In addition to the Work Opportunity Tax Credit (WOTC) saving businesses money on their tax bills, this tax credit also provides quality jobs to Americans who are down on their luck, who need assistance in difficult times, and who have served our country honorably. New WOTC hires like veterans, TANF and SNAP recipients, and the long-term unemployed put great value on receiving a job after being out of work. These employees tend to be productive and stay with an employer long-term because they have an opportunity to get off of public assistance and earn a living.
How businesses benefit from WOTC
The business environment, in general, also benefits. When WOTC-eligible candidates are hired, both the state in which the business is located and the federal government save significant taxpayer dollars by moving people off of public assistance. The amount of tax credit received by businesses is offset by these savings by up to a 15:1 ratio or more in some states. In the long term, this type of continued savings may result in further reduced tax burdens for businesses.
How employees benefit from WOTC.
The categories of individuals who qualify for WOTC are historically underemployed segments of the population and/or are those who may experience undue prejudice when applying for a job.
The long term unemployed, WOTC’s newest target group, contains many individuals who have been out of the workforce for extended periods of time. Getting these individuals off of unemployment compensation and public assistance is critical for positive economic growth.
Veterans provide unique skills learned while serving our country that apply directly to jobs in almost every field such as leadership, teamwork and composure, just to mention a few. When they return from duty, these veterans deserve every advantage and opportunity available to become reintegrated and productive members of society. WOTC provides businesses with a valuable incentive for giving them that opportunity.
WOTC benefits everyone involved across the board: businesses, qualified new-hires and taxpayers at large. WOTC is valid through 2019, so the earlier a business starts the program, the greater the benefits for all participants. If your business is not currently taking advantage of WOTC, there is no better time to start than now.