There are many underutilized government incentives available for small businesses—from healthcare to gender to scope of work. These credits aim to help small businesses thrive while improving the economy and employment of workers as a whole. One of which is the Work Opportunity Tax Credit (WOTC), a credit provided to businesses for the employment of workers from specific target groups that have otherwise endured consistent obstacles in gaining employment.
So what does this mean?
Well, target groups are qualified individuals from one of the following categories:
- Unemployed veterans, including unemployed disabled veterans
- Individuals receiving food stamps
- Ex-felons
- Individuals receiving Temporary Assistance For Needy Families (TANF)
- Designated Community Residents From Federal Empowerment Zones or Rural Renewal Counties
- Individuals Receiving Supplemental Security Income
- Summer Youth Employees From Federal Empowerment Zones
- Individuals Receiving Long-Term Unemployment
- Vocational Rehabilitation Referrals
There are, of course, certain eligibility criteria within these groups to be met, such as duration of unemployment, but these groups are the frameworks of workers with significant barriers in gaining employment. However, while many employers do not take advantage of the WOTC, there are many reasons why you should. Here are just a few of them:
Financial Incentive
The Work Opportunity Tax Credit can be averaged to about $145 per target group new hire within a year. This is just an average and can be greater or lower depending on the circumstances of your company. While that number can significantly add up for larger companies, smaller businesses can benefit greatly from those incentives as well when it comes to their own hires.
Diversity
Having a diverse workforce within your company is vital for change. America thrives upon being a melting pot, where individuals from all walks of life have a chance to grow and change the world. That all starts on a smaller scale, and your business can help that.
Anti-Discrimination Compliance
Several of the qualified individuals from the respective target groups simultaneously fall under anti-discrimination groups. Adopting that mentality as an employer now with the receipt of the WOTC can help maintain that compliance down the road as you go about employing new workers who may fall out of the scope of those target groups.
New Skillsets
There are many individuals who have brilliant tools that didn’t come from formal training. The only thing missing is their opportunity to shine. As a small business, utilizing the hidden expertise of these individuals can grow your business to unfathomed dimensions. Just because someone falls under those target groups does not mean they aren’t just as (if not more) skilled than hires deemed as more “employable” by other companies.
Building a Better Tomorrow
This speaks directly to the hiring of youths from Federal Empowerment Zones. There are many bright young minds waiting for the chance to join an organization and show what they’re capable of. Now is your chance to help them hone those skills. Who knows? They can someday become key players in your company as adults.
For more information on the Work Opportunity Tax Credit, click here.