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Is it Worth it to do the Work Opportunity Tax Credit?

At iRecruit, we’re often asked the question “Is it Worth it for us to do the Work Opportunity Tax Credit?” There is certainly a lot of value in this Federal Tax Credit available to employers that hire individuals from disadvantaged groups of workers that have historically faced barriers to finding employment. Typically, each year $3.5 Billion dollars in tax credits are given to participating employers.

Including WOTC Screening with iRecruit can save an employer significant amounts of money. Is it worth it for your organization to start doing W.O.T.C. screening? It may depend on how many people you hire. If you are typically only hiring a handful of employees per year, (1-5) it may not be worth the time. However, if you a hiring, and you’re in an Empowerment Zone, yes, do it anyway. Empowerment Zone credits are available. If you’re hiring 20-100+ new employees annually, or if you face a lot of turnover in your industry, hire veterans, or are a seasonal employer. Don’t wait, start screening now so you don’t miss out on tax credits.

Per Brian Kelly, of Cost Management Services: “I look at it as absolutely! We know statistically over the last 20 years of performing WOTC services that 10-15% of the workforce qualifies for the WOTC program. So, if we have 100 new hires per year, we know 15% of them qualify we say the average tax credit is $2,000. That’s $30,000 in tax credit savings per year. So, absolutely, take advantage of the program.”

Five Fast Facts About the Work Opportunity Tax Credit:

  1. WOTC is handled by three agencies: the IRS, your State Department of Labor, and HUD.
  2. WOTC is available for new hires only – no rehires are eligible.
  3. Screening must be completed and submitted to the State Workforce Agency within 28 days of the new hire’s start date.
  4. There are ten target groups for WOTC, all who have faced barriers to employment:
    1. Qualified IV-A Recipient
    2. Qualified Veteran
    3. Ex-Felon
    4. Designated Community Resident (DCR)
    5. Vocational Rehabilitation Referral
    6. Summer Youth Employee
    7. Supplemental Nutrition Assistance Program (SNAP) Recipient
    8. Supplemental Security Income (SSI) Recipient
    9. Long-Term Family Assistance Recipient
    10. Qualified Long-Term Unemployment Recipient
  5. CMS does the heavy lifting for you to make understanding, and utilizing this program easy.

How iRecruit Can Help!

WOTC Screening can be included in iRecruit, as part of the application process, or in iConnect, as part of your new hire (online) paperwork. iRecruit recently updated its WOTC integration to make this easier for our customers.

CMS, the publisher of iRecruit, has been providing WOTC screening services for over 24 years and are experts in this field.

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