The Work Opportunity Tax Credit (WOTC) is a federal program that provides tax incentives to employers who hire individuals facing significant barriers to employment. This program has been in place for 26 years and is a partnership between businesses and the federal government. The purpose of the WOTC is to motivate employers to hire and retain employees with federal income tax credits, recognizing the social good that is done when these individuals with historically high unemployment rates are hired.

For every qualified employee that an employer hires through the WOTC program, the business is eligible for up to $9,600 in hiring incentives. On average, these incentives amount to $1,560 per qualified hire based on wages in the first year of work. The Consolidated Appropriations Act of 2021 extended the WOTC program until December 31, 2025.

The WOTC has several target groups that are eligible for specific tax credit amounts. These include:

  • WOTC Core Target Groups: $2,400 per new hire 
  • Unemployed Veterans: $5,600 per new hire 
  • Disabled Veterans: $9,600 per new hire 
  • Long-term Welfare: $9,000 per new hire

It’s important to note that these generous incentives are valuable for both businesses and the government. In fact, the government often benefits more from the WOTC program than businesses do.

McKenzie Chase Management (MCM) offers several advantages for businesses participating in the WOTC program. With 40 years of experience, MCM’s expert consultants know how to fight for tax credits on behalf of their clients. The company’s policy of billing only on success eliminates financial risk for clients. MCM also provides corporate reporting to all clients, whether they are corporations or not, and uses technology to streamline the qualification process and eliminate errors. Overall, working with MCM provides an excellent return on investment.

To sum it up, the WOTC is a federal program that provides tax incentives to employers who hire individuals with high employment barriers. This program is designed to recognize social good in the form of tax incentives to employers who hire such individuals. MCM offers a variety of advantages for businesses participating in the WOTC program, including expert consulting, risk-free billing, and streamlined qualification processes.
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