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Hiring Vets

How to Effectively Claim the Work Opportunity Tax Credit

The Work Opportunity Tax Credit (WOTC) is a valuable incentive program to potentially reduce your tax liability while making a positive impact in your community. As a small business owner, you have the opportunity to uncover the immense benefits and potential that tax credits can have on your business. In this article, we’ll break down the basics of the WOTC and explain how it can benefit both your business and the individuals you employ.

Determine Employee Eligibility

The first step in claiming the WOTC is to determine whether an employee falls into one of the targeted groups specified by the IRS. These groups include qualified IV-A recipients, qualified veterans, qualified ex-felons, designated community residents, vocational rehabilitation referrals, summer youth employees, SNAP recipients, Supplemental Security Income recipients, long-term family assistance recipients, and qualified long-term unemployment recipients.

Apply for Certification

To certify that an employee qualifies for the WOTC, you need to submit these forms to the state workforce agency (SWA) in your state within 28 calendar days from the employee’s start date.

  1. Have the job applicant complete Form 8850 before or on the day of making a job offer.
  2. Complete the remaining sections of Form 8850 at the time of the job offer.
  3. Fill out the conditional certification Form 9061 (or request Form 9062 if the applicant already has it).
  4. Check to see if any additional forms are required for the applicant’s specific targeted group.
  5. The SWA will provide you with a letter confirming the employee’s eligibility or denial.

Tax Credit Calculation

Once an employee is certified as eligible for the WOTC, you need to determine the qualified wages that can be considered for the tax credit. Qualified wages are the wages on which you paid Federal Unemployment Tax Act (FUTA) tax during the employee’s first year of work. However, wages paid while receiving payment from a federal on-the-job training program or reduced by Social Security Act payments should be excluded.

Additionally, you need to identify the maximum allowable wages for each employee category, which depend on the target group. These limits can be found in the IRS instructions for Form 5884.

Claim the Work Opportunity Tax Credit

  1. Use Form 5884 (or Form 5884-C for tax-exempt organizations that hired qualified veterans) to calculate the allowable credit based on the qualified wages determined in your tax credit calculation.
  2. Enter the maximum allowable wage on Form 5884, Line 1A (for employees working between 120 and 400 hours) or Line 2 (for employees working more than 400 hours).
  3. Transfer the calculated credit to Form 3800, General Business Credit , which will be filed with your business tax returns.
  4. Keep a record of the certification and all supporting documentation for future reference and potential audits.

Successfully claiming the Work Opportunity Tax Credit can result in significant tax savings for your business while fostering employment opportunities for individuals from targeted groups. By following the steps outlined in this guide, you can navigate the process with confidence and maximize the benefits of the WOTC program.

Let Us Help

At Tax Credit Group, we specialize in helping businesses identify and claim various tax credits and incentives. Reach out to our team of experts to streamline the WOTC process and ensure you receive the maximum benefit from this valuable tax credit.

The Benefits of Work Opportunity Tax Credits

As a business owner, it’s important to be aware of all the tax incentives that are available to you. One such incentive is the Work Opportunity Tax Credit (WOTC), a federal tax credit for employers that hire individuals from specific groups that have historically faced barriers to employment.

Eligible Employee Groups

Eligible employee groups for WOTC include veterans, individuals receiving public assistance, ex-felons, and several other groups. Hiring from these groups not only promotes diversity and inclusion in the workplace, but it also allows businesses to take advantage of the WOTC tax credit.

Tax Credit Amounts

The tax credit amounts available vary based on the length of time the employee works for the company and the employee’s wages. According to the official IRS website for the WOTC program, businesses can claim up to $9,600 per eligible employee, depending on the employee’s specific target group and the number of hours worked. This can add up to significant savings for businesses, especially those in industries with high turnover or recruitment costs.

Applying for WOTC

One of the benefits of the WOTC program is that it is not limited to certain industries or regions. As stated by the Department of Labor, any for-profit business, tax-exempt organization, or government entity that employs individuals in the United States may be eligible to claim the credit. This means that businesses of all sizes and in all industries can take advantage of the program.

State Specific Credits

In addition to the federal WOTC, many states also offer their own WOTC program, which can provide additional tax savings for businesses.

Tax Credit Group

The Work Opportunity Tax Credit is a valuable incentive for businesses that hire individuals from specific groups that have historically faced barriers to employment. By taking advantage of this tax credit, businesses can not only promote diversity and inclusion in the workplace, but also reduce their tax bill and generate a return on investment. If you want to take advantage of this opportunity and other credits your business may qualify for, don’t hesitate. Contact Tax Credit Group so we can help you navigate the process and maximize your savings.

Lucrative Tax Incentives for Employers

As a tax credit consultant, it is our job to help businesses navigate the complex world of tax incentives and deductions. We specialize in helping employers take advantage of the many lucrative tax incentives available to them. In this article, we will be sharing some of the key incentives that employers should be aware of and how they can take advantage of them.

Supporting the Community

First, let us talk about supporting the community. Many states offer tax incentives for businesses that make charitable donations or sponsor community events. For example, some states offer credit for businesses that sponsor local little league teams or make donations to food banks. By giving back to the community, businesses can feel good about doing their part but also benefit from a reduced tax bill.


Another way for employers to take advantage of tax incentives is by hiring from specific groups. The Work Opportunity Tax Credit (WOTC) program is a great example of a valuable tax incentive for employers. This program provides tax credits to employers who hire individuals from certain targeted groups who have consistently faced significant barriers to employment. By hiring from these groups, employers can reduce their tax bill while also helping to promote diversity and inclusion in the workplace.

Development Opportunities

Offering training and skill development is also a terrific way for employers to take advantage of tax incentives. Many states offer tax credits for businesses that invest in employee training and development programs. By providing opportunities for employees to improve their skills, employers can also improve the productivity and performance of their workforce.

New Jobs

Finally, bringing new jobs to the community is another way for employers to take advantage of tax incentives. Many states offer tax credits for businesses that create new jobs or expand their workforce. By investing in new hiring, businesses can also grow their operations..

Tax Credit Group

There are many lucrative tax incentives available to employers that can help them save money while also supporting the community, promoting diversity, and investing in employee training and development. If you are an employer and want to take advantage of these incentives, it is important to consult with a tax credit consultant. Call us today at (563)583-2115 to ensure that you are maximizing your savings.

How to Observe Memorial Day with Veterans

On the last Monday of May, Americans observe Memorial Day. But the purpose of Memorial Day is often lost on a large part of the American public. According to a 2019 survey conducted by Harris Poll on behalf of the University of Phoenix, only 55 percent of Americans know the true meaning of Memorial Day.

What is Memorial Day?

The short answer is Memorial Day is when we take a moment to honor the men and women who have died in service to our country.

PBS dives a little deeper into the history of Memorial Day saying, “It was first widely observed on May 30, 1868, to commemorate the sacrifices of Civil War soldiers, by proclamation of Gen. John A. Logan of the Grand Army of the Republic, an organization of former Union sailors and soldiers.”

“During that first national commemoration, former Union Gen. and sitting Ohio Congressman James Garfield made a speech at Arlington National Cemetery, after which 5,000 participants helped to decorate the graves of the more than 20,000 Union and Confederate soldiers who were buried there.”

How is Memorial Day different from Veterans Day?

Make no mistake, Memorial Day is not Veterans Day. For one thing, Memorial Day is always observed on the last Monday in May, while Veterans Day is November 11.

But it’s more than that. Memorial Day honors the fallen, while Veterans Day honors the people who have served their country. In other words, veterans honored on Veterans Day can still be alive.

Should I thank a veteran on Memorial Day?

Do not thank a veteran on Memorial Day.

For many veterans, Memorial Day is a day that they are remembering the friends that they lost while in service. As one Navy Veteran told NPR, “On Memorial Day, the veteran you’re talking to may be going through a bit of melancholy remembering people who died over the years.”

Be mindful that for many veterans, this is a day of mourning.

Is “Happy Memorial Day” okay to say?

As stated earlier, Memorial Day is meant to be a day of mourning, so saying “Happy Memorial Day” isn’t something you want to do.

What should I say instead of Happy Memorial Day?

According to the website DiversityInc, consider the following phrases:

  • “Enjoy your weekend, but I want you to know that I will be remembering what this holiday is about.”
  • “Enjoy your weekend and I will be thinking about those that are no longer with us.”
  • “I will be taking a moment this weekend to honor those that served our nation and are no longer with us.”

How can I observe Memorial Day in the time of COVID-19?

In this time of COVID-19, it will be more difficult to observe Memorial Day. According to, national cemeteries will be open, though flags will not be placed at gravesites as they have in years past. Depending on the local rules in your city or county, you may also be required to wear a mask when you visit a gravesite at a national cemetery.

If you have a loved one that you would like to honor, the American Legion is using social media to honor the fallen. You can find out how to sign up, here.

According to the Memorial Day Foundation, if you fly the American flag at your facility, you can fly it at half-staff until noon on Memorial Day. It’s tradition to then raise the flag to full-staff until sunset.

You can also participate in a “National Moment of Remembrance” at 3:00 p.m. local time. It’s a moment to pause and think about the meaning of Memorial Day. Taps can also be played at this moment.

Why Military Veterans Make Great Employees


It’s no secret the military veterans are prized employees, but have you thought about just how valuable they can be?

1. They have some of the best training in the world. Their job calls for operating all sorts of equipment and cutting-edge technology sometimes on a moment’s notice. With this practice, they have adaptability to quickly learn new technologies and skills necessary to succeed on the job.

2. They are experts in specific detailed communication. Imagine guiding a pilot landing a jet that is carrying a 500-pound bomb on a ship. Clear precise communication is key for the fate of the lives of those on the ship and the plane. How about giving instructions to an injured, foreign civilian who speaks no English? This scenario equips soldiers to interact sensitively and quickly across diverse cultures.

3. They’re the ultimate team player. Living together with a crew out at sea, in the desert, jungle or the forest has its perks, but room for discomfort, especially if you’ll be there for months at a time. Calm disposition and quick action, for the troop’s safety and morale, are imperative if you’re fighting enemy fire side by side with a fellow, injured soldier.

4. They’re singularly focused on mission objectives. This frame of thought helps veterans look at the bigger picture and focus on winning battles during the ultimate tests of distractions and emotional highs and lows.

5. They’re relentless in their approach because they don’t know how to quit. They have made the ultimate sacrifices, leaving behind family and friends at home, putting that on hold to defend citizens’ freedoms and lives. Military slogans, such as “Army Strong” and “Serve Before Self”, are just defining traits of their work ethics. This commitment translates to dedication and persistence in the work place.
Not only have they been trained to know how to do all the things listed above, but they’ve also implemented their training in real-life, stressful, high stakes situations.  In reality, you can’t find any civilian that is as trained and experienced as former military personnel.

In order to honor the service of our patriotic service men and women our government has made some fantastic incentives for you to hire military veterans.

When companies hire soldiers returning from active duty, they could be eligible for up to $2400-9600 in tax credits. Hiring unemployed veterans could qualify businesses for as much as $5,800 while providing jobs to disabled servicemen and women rewards business up to 9,600 over a two-year period. Plus, more pending, veteran hiring incentives are on the voting agendas in Washington.

For now, this is a great opportunity to give back to those who have served. The reward is a well-rounded employee, thus saving your business hiring and training costs, and a lucrative tax credit, all for your bottom line.

To find out how much you’ve been missing in tax credit savings, you can use our free calculator here.

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