- July 19, 2021
- Posted by: Stratford Team
- Category: Business
It’s not easy to hire workers these days. But if your business hires a member of a certain group, you can claim the potentially lucrative Work Opportunity Tax Credit (WOTC). Here’s what you need to know to make the WOTC a tax saver for your business.
This federal income tax credit generally equals 40% of qualified first-year wages paid to an eligible employee, up to a maximum wage amount of $6,000. That translates into a maximum credit of $2,400 per eligible employee (40% x $6,000). That helps.
The credit rate is reduced to 25% of qualified first-year wages for an employee who completes at least 120 but less than 400 hours of service. That translates into a maximum credit of $1,500 (25% x $6,000) per eligible employee. Not bad at all.
Qualified first-year wages means qualified wages paid for services rendered during the one-year period beginning with the day the newly hired employee begins work.
Special rules apply to certain veterans,…