Claim the Work Opportunity Tax Credit Before It Expires

Employers who hire new workers may qualify for a valuable federal tax benefit — but time is limited.

The Work Opportunity Tax Credit (WOTC), a long-standing incentive designed to encourage the hiring of individuals who face barriers to employment, is set to expire after December 31, 2025, unless Congress acts to extend it.

What Is the WOTC?

The WOTC is a federal tax credit available to employers who hire individuals from certain targeted groups. These groups include:

• Qualified veterans
• Ex-felons
• Recipients of SNAP (food stamp) or TANF (welfare) benefits
• Supplemental Security Income (SSI) recipients
• Long-term unemployment recipients
• Vocational rehabilitation referrals
• Summer youth employees in empowerment zones

The credit is available to businesses of all sizes and across industries. For tax-exempt organizations, special rules apply — they may claim the credit only for qualified veterans.

How Much Is the Credit Worth?

The amount of the credit generally ranges from $1,200 to $9,600 per qualified employee, depending on the target group and hours worked. The credit is based on a percentage of first-year wages (typically up to 40% of the first $6,000 in qualified wages for most groups).

Why Employers Should Act Now

The WOTC provides a meaningful way for businesses to lower their tax burden while making a positive impact in their communities. However, unless Congress renews it, the program will expire for workers hired after December 31, 2025.

If you’re planning to expand your team, now is the time to evaluate whether potential hires may qualify your business for this credit.

For More Information or Next Steps

Understanding how to properly certify and claim the credit can be complex. Our team at Erwin, Fountain & Jackson, P.A. can help you:

• Identify eligible hires
• File the required forms accurately and on time
• Calculate the credit for your tax return

Contact our office to learn how your business can benefit from the Work Opportunity Tax Credit before it’s too late. Jacksonville accounting firm Erwin, Fountain & Jackson P.A..