Employers who hire veterans gain valuable employees and big tax breaks
Veterans commit years of their lives to ensuring security for the civilian lives most of us lead. After discharge, however, they can face unique challenges while re-entering the civilian workforce, despite the valuable skills and characteristics they develop during their service.
That may explain why only one in four veterans has a job lined up after leaving the armed forces. 200,000 veterans return to civilian life annually. That means at least 150,000 veterans search for jobs every year!
Employers who hire veterans bring on experienced, capable, and responsible employees. More and more, these employers are also enjoying added tax benefits made available through the Work Opportunity Tax Credit program (WOTC).
Employers who claim WOTC for hiring qualified veterans lower federal tax liabilities by up to $9600 per eligible employee! What could your business achieve with freed-up cash and highly capable new hires?
What is WOTC?
WOTC provides tax credits for businesses and organizations who hire and retain certified applicants from one of nine disadvantaged target groups. The credits range from $1200-$9600. There is no maximum allowable credit. WOTC’s purpose is to incentivize employers to create quality career pathways for Americans who may otherwise rely on government resources to survive.
Certain veterans qualify for WOTC. Each certified new hire lowers their employer’s tax liability by up to $9600.
Which veterans qualify for WOTC?
There are five ways to qualify for WOTC as part of the Qualified Veteran targeted group. A new hire must be a veteran AND:
1) A member of a family receiving assistance under the Supplemental Nutrition Assistance Program (SNAP) (food stamps) for at least a 3-month period during the 15-month period ending on the hiring date, or
2) Unemployed for periods of time totaling at least 4 weeks (whether or not consecutive) but less than 6 months in the 1-year period ending on the hiring date, or
3) Unemployed for periods of time totaling at least 6 months (whether or not consecutive) in the 1-year period ending on the hiring date, or
4) Entitled to compensation for a service-connected disability and hired not more than 1 year after being discharged or released from active duty in the U.S. Armed Forces, or
5) Entitled to compensation for a service-connected disability and unemployed for periods of time totaling at least 6 months (whether or not consecutive) in the 1-year period ending on the hiring date.
In 2023, over 120,000 people qualified for WOTC as veterans. They earned approximately $540 million in WOTC for their employers.
WOTC employees help businesses grow
The benefits of a well-executed WOTC program extend beyond lowered tax liabilities. All things considered, WOTC employees are 408% more profitable for their employers than non-WOTC employees. That’s in part due to the fact that research shows that WOTC workers:
- Perform better than or equal to their peers
- Stay in their job as long or longer than non-WOTC employees
- Are less likely to leave their job in the first year than their peers
- Earn as much over time as their peers
- Progress through career ranks at the same pace as non-WOTC employees
- Are just as likely as non-WOTC employees to move to another job following their WOTC-eligible job (rather than unemployment)
Additionally, WOTC workers tend to come from diverse backgrounds, and bring diverse experiences to workforces. As a result, adding WOTC employees to your workforce can benefit DEI initiatives, and benefit your workplace culture in a myriad of ways–including driving innovation and growth, according to Harvard Business Review.
We’ve helped hundreds of companies realize >40% increases in cash flow through implementing WOTC.
Arvo provides risk-free WOTC services
Veterans are only one of nine groups eligible for WOTC. All things considered, over 20% of Americans qualify for WOTC. In fact, the IRS issued nearly $5 billion in WOTC in 2023! If your business isn’t claiming any part of that huge benefit, don’t wait any longer.
Our fees are 100% contingent, so there is no risk in integrating our WOTC tools and solutions.
If you already claim WOTC by another means and would like to learn how we can get you more, schedule a call with one of our tax experts today.
There’s no reason to wait to make a difference for your business and for veterans re-entering the civilian workforce.