There are many underutilized government incentives available for small businesses—from healthcare to gender to scope of work. These credits aim to help small businesses thrive while improving the economy and employment of workers as a whole. One of which is the Work Opportunity Tax Credit (WOTC), a credit provided to businesses for the employment of workers from specific target groups that have otherwise endured consistent obstacles in gaining employment.
So what does this mean?
Well, target groups are qualified individuals from one of the following categories:
• Unemployed veterans, including unemployed disabled veterans
• Individuals receiving food stamps
• Individuals receiving Temporary Assistance For Needy Families (TANF)
• Designated Community Residents From Federal Empowerment Zones or Rural Renewal Counties
• Individuals Receiving Supplemental Security Income
• Summer Youth Employees From Federal Empowerment Zones
• Individuals Receiving Long-Term Unemployment
• Vocational Rehabilitation Referrals
There are, of course, certain eligibility criteria within these groups to be met, such as duration of unemployment, but these groups are the frameworks of workers with significant barriers in gaining employment. While many employers do not take advantage of the WOTC, there are many reasons why you should. Here are just a few of them:
The Work Opportunity Tax Credit for most categories is $2,400, but certain categories such as those for disabled Veterans can generate up to $9,600.
The average amount of tax credits depends on the mix of target group new hires but, in any event, adds up to significant tax credits, whether the company is large or small .
Having a diverse workforce within your company is vital for change. America thrives upon being a melting pot, where individuals from all walks of life have a chance to grow and change the world. That all starts on a smaller scale, and your business can help that.
Several of the qualified individuals from the respective target groups simultaneously fall under anti-discrimination groups. Adopting that mentality as an employer now with the receipt of the WOTC can help maintain that compliance down the road.
There are many individuals who have brilliant tools that didn’t come from formal training. The only thing missing is their opportunity to shine. As a small business, utilizing the hidden expertise of these individuals can grow your business to unfathomed dimensions. Just because someone falls under those target groups does not mean they aren’t just as (if not more) skilled than hires deemed as more “employable” by other companies.
Building a Better Tomorrow
This speaks directly to the hiring of youths from Federal Empowerment Zones. There are many bright young minds waiting for the chance to join an organization and show what they’re capable of. Now is your chance to help them hone those skills. Who knows? They can someday become key players in your company one day
For more information on the Work Opportunity Tax Credit, click here.