Recently, I had the opportunity to publish an article for the International Franchise Association (IFA). Here is an excerpt of that article. Contact me to learn more about how PrimePay can help!
Approximately 370,000 veterans are unemployed, according to the U.S. Bureau of Labor Statistics.
Adding a veteran to your staff not only helps reduce that staggering number, but also opens your franchise up to a world of opportunity.
That’s where the Work Opportunity Tax Credit (WOTC) comes in. This underutilized tax benefit for hiring certain types of employees – like veterans – can boost your bottom line. WOTC can reduce your federal income tax liability by up to $9,600 per veteran hired.
With a bit of knowledge and the right tools, WOTC is a great way for you to give back to the veteran community and align your employees with your mission.
What is WOTC?
WOTC is a federal tax credit available to employers who hire veterans and individuals from certain targeted groups. If you’re an eligible employer, you can receive between$2,400 and $9,600 in tax credits per employee.
Created in 1996 and modified since, the goal of the program remains the same: to incentivize workplace diversity and facilitate access to good jobs for workers.
WOTC and hiring veterans.
“The fact that a program like WOTC exists is such an amazing opportunity for the veteran community,” said Monty Heath, Navy SEAL and Director of Veterans in Business at PrimePay. “For veterans transitioning to civilian life, the job market can be extremely challenging. But knowing employers can get a little boost from fulfilling their desire to support our community is a win all around.”
What makes a veteran a great hire? Veterans are mission-focused and accustomed to rapidly adapting to new skills and thinking under pressure. They also have a deep understanding of what it means to work on a team, which is essential for your franchise operation.
Their innate sense of integrity, respect and determination are desirable qualities that are not easy to find.
The IRS explains that a ‘qualified veteran’ eligible for WOTC meets these requirements:
- A member of a family receiving assistance under the Supplemental Nutrition Assistance Program (SNAP) for at least three months during the first year of employment. Maximum tax credit: $2,400.
- Unemployed for at least four weeks but less than six months in the one-year period ending on the hiring date. Maximum tax credit: $2,400.
- Unemployed for at least six months in the one-year period ending on the hire date. Maximum tax credit: $5,600.
- A disabled veteran entitled to compensation for a service-connected disability hired within one year of discharge or release from active duty. Maximum tax credit: $4,800.
- A disabled veteran entitled to compensation for a service-connected disability who is unemployed for at least six months in the one-year period ending on the hire date. Maximum tax credit: $9,600.
Not that employees must work at least 120 hours in the first year of employment to receive the tax credit.
Specifics on these criteria can be found via the Internal Revenue Service.