How We Earned $50k in Tax Credits
Using a 2-minute questionnaire
This year we will earn almost $50k in tax credits by having every new employee complete a 2-minute questionnaire
Here’s how you can do the same:
The government has a program called the Work Opportunity Tax Credit or “WOTC.”
It provides employers a tax credit (not just a deduction) as a percentage of wages to qualified employees.
“The Work Opportunity Tax Credit (WOTC) is a Federal tax credit available to employers for hiring and employing individuals from certain targeted groups who have faced significant barriers to employment.”
How Much Can You Earn?
The maximum credit is $2,400 per employee for most groups. It's calculated as 40% of the first $6,000 in wages paid to employees who:
1st year of employment +
certified as being a member of a targeted group +
works at least 400 hours
Some groups qualify for a larger credit. You can also earn partial credit if the employee works less than 400 hours (but more than 125)
Employees qualify if they fall into one of the 9 groups:
the formerly incarcerated or those previously convicted of a felony;
recipients of state assistance under part A of title IV of the Social Security Act (SSA);
residents in areas designated as empowerment zones or rural renewal counties;
individuals referred to an employer following completion of a rehabilitation plan or program;
Individuals whose families are recipients of supplemental nutrition assistance under the Food and Nutrition Act of 2008;
recipients of supplemental security income benefits under title XVI of the SSA;
Individuals whose families are recipients of state assistance under part A of title IV of the SSA; and
Individuals experiencing long-term unemployment.
How To Get Credit
I'd recommend using a company that does all the work for you instead of DIY. They will screen candidates, see who qualifies and submit all the paperwork to certify the qualification.
We use HireTech, paid on commission as a percentage of credits earned. There are many different providers out there. Depending on the volume, they charge between 15%-30%
How to Maximize Your Credit
Until last year our onboarding process was very manual. One of the items on our checklist was to have the employee complete the HireTech questionnaire, but only a small percentage did
In Jan 2022, we moved to a payroll company that had "360 integration" w/ HireTech. Now every new employee completes the questionnaire in the same workflow.
The combination of growing our company from 50 to 200 employees plus the payroll integration increased our credit from $4k to $12k to now almost $50k
These are tax CREDITS, not DEDUCTIONS - big difference. My brother and I will pay the IRS almost $50k less this year thanks to a 2-minute process.
Get Started Today!
A good number of employees will likely qualify if you are in a service business. We're at 30% qualified x average credit of $2,167
Hire 20 people per year x 25% qualify = 5 qualified
5 x $2,000 average = $10k credit
$10k credit to provide jobs & complete a 2-minute questionnaire
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