Did You Know? Give an Ex-Offender a Job, Get Tax Credits in Return

Written by Corporate Tax Incentives. Updated Sep 30, 2019.

WOTC_DIdYouKnowHave you made mistakes? Sure. Did something dishonest? Possibly. Maybe you intentionally hurt your mother’s feelings or told a friend you already had plans when you didn’t.

Let’s go bigger: Perhaps you “relocated” some extra office supplies to your home office or parked in the handicap spot to “run in quickly.”

Let’s go bigger still: Maybe you misrepresented your tax deductibles or dented someone’s car and drove away without a note.

We all commit acts that likely bring regret, or at least a tinge of shame. Typically, we learn from our wrongs and vow to not do them again.

However, most of us draw the line at actions that could land us in jail. Most of us. Others, whether through direct intent or circumstance, cross that line. And, yes, many do harbor regrets for it. They recognize their wrongs, they serve their time, and they commit to not going back.

However, former inmates who are dedicated to earning an honest living and ‘staying clean’ often face bars, not of steel, but of judgement and fear. These bars block them from securing self-supportive employment – the cornerstone of their virtuous pursuit.

The Changing Gang

Various studies indicate that finding employment within the first year of freedom will cut newly released criminals’ chances of re-offense by approximately 20 percent.1 Sadly, one-third of U.S. citizens hold a criminal record…60 percent of them are still unemployed one year after their release.2

Learn More: Vets Are Opening Small Businesses – Who’s Offering Direct Support?

Most states have established various employment programs for ex-offenders, and last year President Trump declared April “Second Chance Month” to devise “expanded opportunities for those who have worked to overcome bad decisions earlier in life.” He encouraged prisons across the nation to provide skills and job training.

Though these efforts are encouraging, do they work to persuade businesses to take a chance on this controvertible workforce group? Do they offer organizations a perk for taking a chance on an employee with a past?

Paying the Way to Reparation

The federal Work Opportunity Tax Credit (WOTC) does both. It incentivizes companies to take that perceived risk. But many businesses aren’t aware of the WOTC – even if they have knowingly hired a person with a checkered past. They don’t realize the amount of precious tax savings they’re surrendering.

When a company selects an ex-convict as an employee (one of 14 WOTC target groups), the federal government awards up to $2,400 in tax credits, depending on the hours worked.

And some states offer tax incentives that “piggyback” on the WOTC. These may be applied for at the same time as the WOTC as they use overlapping qualifiers to obtain state tax credits.

And money isn’t the only advantage the formerly incarcerated release to an employer. Ex-felons present the potential for a dedicated, disciplined, and loyal employee. They’re thankful for the opportunity and do what they can to prove it.

Take a Chance on Me

Employers take a chance with any new employee. You never really know who you are getting with a resume and one 30-minute interview. When considering any candidate, employers should practice discretion and listen to their intuition. Proceed with caution, not preconceived judgment.

For every dedicated criminal, there is an ex-criminal who is dedicated to turning his life around. They deserve a chance to prove it. And the WOTC can help pay the way.

For companies that hire felons and are interested in learning more about the WOTC benefits, contact a tax specialist for the most accurate and updated knowledge.


Elevate Your Tax Savings with WOTC

  1. Companies that Hire Ex-Offenders Can Get a Tax Credit, But Very Few Actually Claim It, 2019
  2. I’m an entrepreneur, and I believe in giving ex-felons a second chance, Fast Company, 2019

Topics: Employment Incentives, WOTC

Corporate Tax Incentives

Written by Corporate Tax Incentives

CTI is a tax incentives specialty firm that secures greater tax credits for businesses with our proven project methodology and unparalleled personalized service. For almost 20 years, our elite tax professionals have proactively engaged clients to deliver unmatched value with transparency and efficiency thorough secure in-house software, comprehensive audit-ready deliverables, and 24x7 access to real-time dashboards. We are tax consultancy experts passionate about maximizing credits and incentives for powering the success of your business.