Companies working to capture the maximum savings from corporate tax credits often fail to meet their savings potential when they pursue employment tax credits. The federal Work Opportunity Tax Credit (WOTC) program offers a significant reduction in tax liability, but many businesses do not know how to increase their eligibility.

Fortunately, there are certain methods you can employ to help you capture the WOTC by identifying and hiring qualified employees. The following are three key ways to boost your eligibility rate for this profitable corporate tax credit:

1. Customize Your Hiring Process

Although you know you need to make changes to your hiring process in order to capture more tax credits, you may not know where to begin.

Outsourced tax consultants are valuable resources. If you decide to partner with a tax expert, you need to choose one who is able to customize your hiring process specifically to your business.

Your outsourced tax consultant should consider where you operate, the characteristics of your workforce and your existing internal processes as they help you design a solution that increases your WOTC program eligibility. 

For example, your business may be located in a community where public assistance is common. You would likely qualify for the WOTC program if you hire some of the following eligible employee types:

• Food stamp recipients

• Temporary Assistance For Needy Families (TANF) recipients

• Supplemental Security Income (SSI) recipients

2. Conduct Periodic Reviews

Your business operations are constantly evolving. As such, you need to update your hiring process to match these changes. How do you ensure your hiring processes match your employment needs? You must monitor your processes and conduct periodic reviews.

Partnering with an outsourced tax consultant helps keep you on track. Your tax expert should be proactive in identifying new opportunities to capture more tax credit savings.

For example, one company decided to open a new facility that would add 800-900 new jobs. Their outsourced tax consultant was able to capture an additional credit by monitoring this change. Remember to include your tax advisor in monthly or quarterly discussions of your employment program so they remain up to date on any changes.

Once you build a relationship together, your tax expert is able to help you stay abreast of potential benefits over time. Instead of simply helping you capture one credit at the beginning of your partnership, your outsourced tax consultant needs to focus on long-term goals for generating revenue.

3. Work With Community Employment Agencies

Most cities, towns and counties feature an agency that helps unemployed community members find jobs. Individuals who benefit from employment agencies often live in difficult circumstances that are compounded by their inability to find employment.

By developing a relationship with local employment agencies, you may find new employees who are a good fit for your company and also qualify you for WOTC program savings.

By reducing your tax liability through the WOTC, you are able to make room in your budget for other important aspects of your business. You gain a competitive edge with increased revenue that allows you to implement change and stand out in the marketplace.

If you already pursue incentives such as the WOTC without the help of an advisor, it’s possible you are missing areas that qualify you for additional savings. You must take a close look at your tax strategy to determine whether it’s optimally effective for your business.

Are you looking for more ways to generate revenue for your business by pursuing tax incentives? Learn how to capture profitable location-based tax credits.