We’ve all heard the saying “In life, there are winners and there are losers.” And often this holds true: only one boxer grabs the heavyweight championship title, only one salesperson earns the “Highest Sales” award, only one instructor will be crowned “Teacher of the Year,” only one student snags first place in the science fair…even flipping a coin to determine who has to do the dishes…there’s always a winner and a loser.
But not with employment-based tax credits. They’re like a double-headed coin: both sides can win, the employer and the employee. Even better, both federal and state programs exist to maximize potential. Some programs focus on new-job creation, others encourage employers to hire individuals within certain target groups.
WOTC Credit Double Victory
The federal Work Opportunity Tax Credit (WOTC) stands as one of the most popular employment-related tax incentives. This program helps alleviate an employer’s tax liability, while simultaneously providing barrier-prone individuals - such as veterans or long-term unemployment recipients – greater opportunities to secure jobs by incentivizing their employment.
How it works: The employer is granted a tax credit when it hires an employee from one of the designated categories. Within the 14 target groups, credit values range between $1,200 and $9,600 for each new hire. The company gets a tax break and a needful citizen gets a job. Win, win.
And employment tax incentive program participation scores more than a just few dollars’ savings and a new employee. Those two wins can reverberate throughout the organization and the individual:
Benefits for employers:
- Cuts a business’ tax liability
- Offsets the high cost of new, expanding, or relocated business sites
- Invigorates organizational cash flow
- Negates the need for cutbacks, such as layoffs
- Frees up funding for special projects and additional personnel
Benefits for employees:
- Assists re-entry into the workforce, and thus could
- Release or reduce dependency on public assistance
- Lead to development of new skills
- Build confidence and stability
A Two-Sided Solution with Employment-based Tax Credits & CTI
Participating in an employment tax credit program can lead to bountiful benefits for both an employer and future employees. No matter how you flip the coin, both sides win.
To ensure you get the most out of your ‘winnings,’ consider partnering with CTI’s team of elite tax professionals. They’ll work diligently to maximize your credits with unmatched security and transparency.