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ToggleThe Work Opportunity Tax Credit gives tax relief to employers. It helps companies that hire people who often face job struggles. These may include workers with low skills, criminal records, or long gaps in work. WOTC helps businesses save on taxes and supports job growth. It also gives people a fair chance to rejoin the workforce and feel part of the community.
This tax credit lasts through December 31, 2025. It gives firms a chance to cut tax costs and make a real social impact.
A tax credit lowers how much tax you owe. It works better than a tax deduction. A deduction reduces the income you pay tax on. A credit reduces the tax itself.
If your business owes $5,000 in taxes and you claim a $2,400 tax credit, your new tax bill is $2,600.
“There are two basic kinds of tax credits.
Tax credits support key goals such as:
Here are the most important points to know about the Work Opportunity Tax Credit (WOTC):
Employers may claim the Work Opportunity Tax Credit (WOTC) for the following categories of employees:
This includes those unemployed for long periods, disabled, or receiving public aid. They bring discipline and leadership to the workplace.
Hiring ex-felons helps reduce repeat offenses and offers a second chance. It also promotes workplace diversity.
These workers come from families receiving food aid under the Supplemental Nutrition Assistance Program.
People receiving Supplemental Security Income (SSI) also qualify. They may face economic or physical hardship that limits job access.
Long-term Temporary Assistance for Needy Families (TANF) recipients face big hurdles to stable employment.
These include workers coming from rehab or job training programs. They bring fresh energy and motivation to workplaces.
This group includes people who live in areas with high unemployment or low income. Hiring from this group helps lift local economies.
People without work for over 27 weeks may be eligible. Giving them a job helps break the cycle of long unemployment.
Follow these steps to claim the WOTC:
Each qualified hire can bring up to $9,600 in tax credit, depending on the group and hours worked.
This helps reduce your overall tax bill in a big way.
You can build a team that includes people from diverse and challenged backgrounds. It builds a stronger work culture.
By hiring from target groups, you help local economies grow and improve people’s lives.
Your brand earns respect when you hire responsibly. Clients and customers value businesses that give people second chances.
Workers from target groups often connect through local job agencies or government programs. It saves time and cuts hiring costs. It also speeds up the process and fills roles faster.
When given a chance, many workers from these groups show high drive and commitment. They care more about the job and stay with you longer. This helps reduce turnover and builds a stable team.
Hiring from Work Opportunity Tax Credit groups may connect your business to other government aid or training programs. These can include free skill-building or wage subsidies.
The WTOC helps both employers and workers. It rewards companies for hiring those who need extra support while offering big tax savings.
If you want to reduce your tax burden and build a strong, inclusive team, the WOTC is the right tool. At Meru Accounting, we help you claim it with ease and accuracy. Our experts handle the forms, checks, and filing process from start to end.