Tax credits offset against a federal or state tax liability. If you owe money on your taxes, the credit will reduce this amount.
There are different tax credits for different situations and parties. Our company works with the Work Opportunity Tax Credit (WOTC) and other government hiring incentives.
Hiring incentives or Tax Credits have been in place since the mid-70’s. They were created to motivate employers to hire job seekers that have difficulty obtaining employment.
- The Federal program which began as Targeted Job Tax Credits (TJTC) became the Work Opportunity Tax Credit (WOTC) in the mid-90’s
- The WOTC program has evolved adding targeted groups and expanding to include various categories and demographics
- Federal zones were added and have been adjusted over the years to target certain disadvantaged areas
Tax credits are given to employers that hire qualified employees. Qualified employees might be veterans, disabled, or on some form of government assistance. For a complete list of WOTC target groups, click here. Tax credits range in value from $1,200 to over $9,000 per qualified hire. These values come off your bottom line! If you hire someone worth $9,000 and maximize the credit, this amount is deducted from your tax liability.
Large volume hiring companies have taken advantage of tax credits for years, now we make this valuable program available to small and mid-size companies through our streamlined cloud-based solution.