With constantly evolving rules and regulations, employment tax incentives can be difficult to navigate. However, every company, no matter how large or small, should consider pursuing employment tax incentives. These credits can provide significant savings when you take steps towards increasing eligibility and capturing benefits for new hires.
Establishing a foundational knowledge of federal and state employment tax incentives is helpful as you consider incorporating these credits in your tax savings strategy. Let’s take a look at a few federal and state credits for which your company may be eligible.
State tax incentives for hiring veterans vary widely in terms of the value of the credit awarded. For example, in New York, businesses may earn up to $5,000 for hiring a qualified veteran and up to $15,000 for hiring a veteran who is disabled. Delaware, on the other hand, provides up to a $1,500 credit for unemployed veterans.
Additionally, the time frame in which savings are awarded is different based on each state. New York’s benefit is a one-time credit, while Utah offers a non-refundable monthly credit of $200 in the first year and $400 in the second year of a qualified veteran’s employment.
The federal Work Opportunity Tax Credit (WOTC) program also provides companies with tax savings for hiring veterans. Businesses may qualify for this employment tax incentive when an unemployed veteran they hire meets some of the following qualifications:
- Received unemployment compensation
- Member of a family that is receiving or recently received food stamps
- Has a service-connected disability
Barriers to Employment
Federal employment incentives are available to companies that hire target groups of individuals who face barriers to employment, including:
- Food stamp recipients
- Temporary Assistance For Needy Families (TANF) recipients
- Qualified ex-felons
- Vocational rehabilitation referrals
- Supplemental Security Income (SSI) recipients
- Native Americans
Many state-level programs also offer businesses employment tax credits for hiring similarly qualified employees within the state. These incentives are designed to provide jobs and promote the growth of state economies by attracting more businesses.
Before your company pursues any state or federal tax incentives, make sure to consult a tax incentives expert. In addition, reviewing online resources from tax companies, government agencies and news organizations will also help to keep your team up-to-date. Ensure your tax savings strategy is consistent with current rules as you work toward generating more revenue for your business.
Are you interested in learning more about profitable tax incentives that may be applicable to your company? Discover what you need to know about capturing location-based tax credits.
For more information regarding what tax incentives your company qualifies for, check out your state here and contact a tax consultant at Corporate Tax Incentives.
