Spring into WOTC Tax Savings: Unearthing and Onboarding WOTC Qualified Candidates

Wednesday April 7th, 2021

Estimated time to read: 2 minutes, 30 seconds

Spring is a season that symbolizes transition. The sun begins to shine more brightly, animals emerge from their winter dwellings, and plants begin to “spring” into bloom. Spring can also mean new opportunities for workers who have consistently faced significant barriers in finding jobs. 

The Work Opportunity Tax Credit (WOTC) program is a sign of hope to individuals with employment challenges and has been reauthorized and extended through the end of 2025. 

Now more than ever, recruiters can tap into overlooked pools of talent and onboard engaged employees with skills that do not necessarily come from formal training. Workers participating in the WOTC, a federal tax credit available to employers for hiring individuals from certain targeted groups, have extra support to look for meaningful employment, ease the transition from job to job, and leverage other government assistance programs.

As businesses begin to reopen or grow after a challenging 2020, programs like the WOTC can help offset federal income tax liabilities. Over $1 billion in tax credits are claimed each year under the WOTC program, according to the Department of Labor (DOL). Are you doing all you can to maximize these savings opportunities as they bloom within your recruiting landscape? Here are a few things to consider:

Plant the freshest talent.

As you evaluate workers to fill positions left open due to market conditions or changing business needs, consider candidates who may get overlooked based on common life circumstances. To qualify for WOTC tax credits, job applicants must fall within at least one of the following categories:

• Qualified IV-A recipient

• Qualified veteran

• Ex-felon

• Designated community resident (DCR)

• Summer youth employee

• Vocational rehabilitation referral

• Supplemental Nutritional Assistance Program (SNAP) recipient

• Supplemental Security Income (SSI) recipient

• Long-term family assistance recipient

• Qualified long-term unemployment recipient

Cultivate maximum business benefit.

The WOTC program benefits virtually any type and size of business. Whether your company hires 20 or 20,000 employees per year, WOTC filings can significantly impact your margins and profitability.

WOTC tax credit amounts depend on the target groups a new employee belongs to and the number of hours worked during the first year of employment. Depending on which target group an individual qualifies under, the maximum credit per new hire can range from $2,400 to $9,600. 

Many businesses avoid proactively recruiting WOTC qualified candidates because of the time it takes to apply for tax credits. For instance, many organizations haven’t invested in the resources needed to fill out forms, send in the required paperwork and wait for a response. Plus, using traditional methods for WOTC administration can lead to additional redundancies and errors, making it difficult for companies to file within the required 28-day period.

Reap simplicity and rewards.

Despite these somewhat daunting eligibility requirements, your business can experience near-term, impactful savings by integrating WOTC tax filing within your employee onboarding experience. Robust human capital management (HCM) technology can simplify otherwise complex WOTC application processes, eliminating time-consuming steps and managing deadlines effectively.

isolved People Cloud, for example, automates all paperwork and reporting for WOTC activities through the employee onboarding experience. isolved’s HCM platform seamlessly identifies WOTC eligible employees, manages tax filing paperwork and provides visibility into tax credits paid back to your business.

In addition to its HCM technology, isolved offers a dedicated support team to research, apply and recoup tax credits. From recruiting WOTC qualified candidates, to untangling “government speak” and researching new incentives available on federal and state levels, the isolved Tax Team supports your tax credit potential.

Growing an engaged team.

Do not let changing regulations and complex tax filing processes stand in the way of finding untapped opportunities for WOTC eligibility. This program can help you build an engaged team with candidates who are looking for a chance to thrive in a new role but have faced significant barriers to employment in the past. By supporting the program with a straightforward approach to WOTC tax credits through HCM automation and personalized support, you can simplify complexities and see a significant business impact.

 

Learn more about automating WOTC tax filing by scheduling a demo for isolved People Cloud.

Mimi Miles

Senior Product Marketing Manager at isolved