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What are the Benefits of WOTC?
WOTC allows employers to claim a credit against their federal income tax liabilities for qualified employees.
WOTC can also be used to offset AMT (Alternative Minimum Tax). Employers generally can earn a tax credit equal to 25% or 40% of a new employee’s first-year wages, up to the maximum for the target group to which the employee belongs.
The average benefit per employee is $2,400.00 and can be as much as $9600.00. That means potentially 10 qualified employees could yield a federal income tax credit between $24K – $96K.
Additionally, WOTC credits may be carried back one year and carried forward 20 years.
Simply put, the WOTC reduces an employer’s cost of doing business and turns Human Resources into a profit center.