Business Tax Credits
Business Tax Credit Services (WOTC)
The Work Opportunity Tax Credit (WOTC) is a Federal tax credit available to employers who hire individuals from eligible target groups with significant barriers to employment. Each year, employers claim over $1 billion in tax credits under the WOTC Program.
Deluxe Payroll through our partnership with Walton Management Services, Inc. will perform the following services related to the administration of federal, state, and local financial incentives, including but are not limited to, workforce training incentive programs, state tax incentive negotiation, the Work Opportunity Tax Credit Program, Empowerment Zone Employment Credit incentive programs, State Enterprise Zone tax incentive programs, and job creation tax incentive programs.
- WOTC reduces an employer’s cost of doing business.
- Tax credit savings range from hundreds to tens of thousands of dollars in tax savings per qualified new hire.
- WOTC can reduce an employer’s federal income tax liability by as much $2,400 to $9,600 for each qualified new hire it makes in the first year or two of employment.
- There is no limit on the number of individuals an employer can hire to qualify to claim the tax credit.
- Hires can come from nine targeted groups, ranging from Veterans to public assistance recipients and designated community residents.
- Certain tax-exempt organizations can take advantage of WOTC by hiring eligible veterans and receiving a credit against the employer’s share of Social Security taxes.
- Location Based Tax Credits: Existing employees and new hires can also qualify businesses for both retroactive and ongoing federal and state tax credits, based on where the business location is.
Businesses can earn a tax credit of between $1,200 and $9,600 per employee, depending on the target group of the new employee and the number of hours worked in the first year. Employees must work at least 120 hours in the first year of employment to receive the tax credit.