You’ve seen the advertising for larger companies – slogans like “Hire a Vet” or “We Offer Second Chances” – appealing to certain groups that would be interested in applying for a job, sparked by this type of focused outreach. To combat the labor shortage that some companies are facing, they are expanding their hiring pool to drum up new applicants that might have barriers to employment. These hiring initiatives help to drive down the unemployment rate for groups that have a hard time re-entering the workforce after transitioning from challenging life experiences.
Why the Work Opportunity Tax Credit Works
While targeted hiring is beneficial to creating a more diverse workforce that fosters second chances and promotes inclusivity, what businesses don’t advertise is the monetary incentive predominantly driving these initiatives. The Work Opportunity Tax Credit (WOTC) is a valuable program designed to provide incentives for businesses that hire individuals from targeted groups, including veterans and ex-felons; groups that traditionally have a hard time finding work.
In a post-pandemic job market, businesses are struggling to find people ready to work. WOTC is a win-win; the program rewards businesses for hiring people that they normally wouldn’t target, while strengthening the economy by maximizing the number of people that earn a paycheck each month.
Learn More: WOTC and Jobs Act Help American Workers Permanently |
The Time is Now
If you look past the unemployment rate and drill down to the types of people that are unemployed, it becomes more apparent why a program like WOTC is vital for businesses and why they should take advantage.
According to the U.S. Bureau of Labor Statistics, there were 50,000 unemployed veterans in 2022. Out of the 14 target groups that a new hire could qualify under WOTC, 5 are designated for qualifying veteran groups.
In an article titled “Out of Prison & Out of Work” – the unemployment rate for formerly incarcerated people is the worst it’s been since the Great Depression; nearly five times higher than the unemployment rate for the general U.S. population.
Instead of shying away from these people trying to reenter the workforce, businesses should consider the financial benefits that accompany hiring veterans and ex-felons. By taking advantage of this program, businesses can claim tax credits that can significantly offset the costs of recruitment, training, and onboarding. The credits range from $2,400 to $9,600 per qualified employee, depending on the target group and the number of hours worked. These incentives not only encourage employers to diversify their workforce but also provide them with a competitive edge in the labor market.
As businesses embrace the WOTC, they not only unlock the potential of deserving individuals but also contribute to the growth and prosperity of their organizations. Contact CTI today and let our team of WOTC experts work to maximize your credit and help you discover your eligibility for this tax credit.
