According to National Tax Credit (NTC), a leading state and federal tax credit processing provider, 90% of “for-profit” businesses qualify for the Work Opportunity Tax Credit (WOTC). The surprising thing is, 50% of all credits go unclaimed, potentially leaving thousands of dollars on the table that could impact a business’ bottom line. There might be a number of reasons why a company wouldn’t claim a tax credit. The two reasons I hear the most with service industry operators that I meet at tradeshows and conferences throughout the year is that they aren’t familiar with WOTC or that WOTC is too paper intensive and time consuming.
First, what is WOTC?
WOTC is a tax credit available to businesses designed for certain target groups that experience significant barriers to employment. Those groups include:
- Veterans, including disabled veterans
- Individuals participating in government assistance programs such as
- Temporary Assistance for Needy Families (TANF)
- Supplemental Nutrition Assistance Program (SNAP) / Food Stamps
- Individuals residing in Empowerment Zones or Rural Renewal Counties, which are economically distressed urban or rural communities
- Vocational rehabilitation referral
- Supplemental security income recipients
- Qualified long-term unemployment recipients (long term is defined as 27+ weeks of unemployment assistance)
Tax credits can be as much as $9600 per eligible employee depending on the target group category the employee falls into.
WOTC is too Paper Intensive and Time Consuming
This might be the case for businesses who manually handle WOTC. But ithere are tools available to make WOTC screening and processing easy. If a business utilizes an end-to-end talent management platform, they can seamlessly integrate WOTC into the recruiting or onboarding process without much effort on the business’ end, all while ensuring compliance.
Fortunately, the talentReef platform offers that seamless process for companies looking to integrate their recruiting and talent management process with WOTC screening. Request a demo today to see how talentReef can do the same for your business.