Illinois businesses gain WOTC certification at high rates

The Work Opportunity Tax Credit (WOTC) program rewards employers who hire and retain disadvantaged job-seekers. The amount of credit an employer can claim is calculated as a percentage of wages paid to WOTC-eligible new hires, after the employee reaches certain hours-worked milestones.

Employers in Illinois received 5.32% of total WOTC certifications in 2022. No matter your industry, business type, or size, the WOTC promises to ease your tax liability and boost your bottom line if smartly integrated into your hiring process.

Which employees in Illinois qualify for the WOTC? 

In order to claim WOTC credits, employers in Illinois must screen applicants on or before the day on which they extend a job offer. Screening applicants determines whether or not the applicant belongs to a WOTC target group

In 2022, the majority of employees for whom employers gained WOTC certification were eligible for receiving various forms of government assistance, including SNAP and unemployment benefits. These employees accounted for nearly 80% of all WOTC certifications in Illinois. 

Designated Community Residents accounted for approximately 4% of total WOTC certifications in Illinois. The Designated Community Resident target group makes residents of federally-designated Empowerment Zones or Rural Renewal Counties eligible for WOTC. Such areas in Illinois include:

    • Southernmost Illinois Delta Empowerment Zone, which includes parts of Alexander, Johnson, Massac, Pulaski, and Union Counties
    • Parts of Chicago, Illinois
    • Parts of East St. Louis, Illinois
    • Rural Renewal Counties, including Alexander, Edwards, Franklin, Gallatin, Greene, Hancock, Hardin, Jasper, Knox, McDonough, Montgomery, Pulaski, Randolph, Richland, Scott, Warren, Wayne, and White.

How much WOTC credit can I claim in Illinois?

The amount of WOTC credit you can claim depends on a number of factors, including your industry, the number of WOTC-eligible employees you hire, the number of hours those employees work, and the basis of their WOTC certification.

Companies within different industries tend to demonstrate unique hiring behavior, which affects the amount of WOTC credit they can earn. You may estimate the total WOTC credit you can earn within your industry using Arvo’s WOTC calculator. Popular industries for claiming the WOTC in Illinois include staffing, trucking, manufacturing, and restaurants. 

The amount of WOTC credit you can claim per eligible employee is capped according to the employee’s basis for eligibility, or target group. A list of maximum allowable credits for the five most commonly certified target groups in Illinois in 2022 follows.

  1. Qualified SNAP recipients: $2400
  2. Qualified Long-Term Unemployment Recipient: $2400
  3. Designated Community Resident: $2400
  4. Qualified Ex-Felon: $2400
  5. Qualified Veteran: $9600

Employers can’t control every factor that helps determine the amount of WOTC credit they can claim. One factor they can exercise some control over, however, is the certification rate of their WOTC-eligible new hires. According to the Department of Labor, the State Workforce Agency in Illinois issued certification for 40% of WOTC eligibility applications in 2023. Illinois businesses who work with Arvo Tech, on the other hand, enjoy certification rates of 59%. 

What is the process of claiming the WOTC in Illinois?

You can claim WOTC credits in Illinois by following six simple steps.

  1. Determine eligibility
    You must screen applicants to determine eligibility on or before the day on which a job offer is made

  2. Complete certification forms
    Employers request WOTC certification from the appropriate state workforce agency (SWA)

  3. Submit forms to SWA
    Forms must be submitted to your SWA within 28 days of the WOTC-eligible employee’s hire date

  4. Receive documentation
    The SWA will issue documentation substantiating their certification or denial of the employee’s WOTC eligibility

  5. Claim the WOTC
    WOTC credits are claimed on an annual basis along with a business’s tax return

  6. Seek professional help
    Businesses who achieve optimal WOTC benefits often do so with the help of experts like Arvo Tech

How Arvo helps

Ready to claim the WOTC in Illinois? Arvo Tech has helped over 65 businesses in Illinois navigate the lucrative but complicated world of employment tax credits. Whether you are brand new to WOTC, or seek to optimize your current WOTC participation, our team of tax experts is here to help you boost your bottom line by up to 40%. 

Plus, our seamless integration with major applicant tracking systems and payroll providers make claiming the WOTC in Illinois easier than ever. 

Contact us today to get answers or expert support for WOTC.