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Work Opportunity Tax Credit: How Intermediaries Can Support Businesses

The article titled "Unlocking Hidden Value With The Work Opportunity Tax Credit: How Intermediaries Can Support Small Businesses" published on Forbes on June 20, 2025, delves into the intricacies of the Work Opportunity Tax Credit (WOTC) and how intermediaries can play a pivotal role in helping small businesses leverage this financial incentive. The WOTC is a federal tax credit available to employers who hire individuals from certain target groups who have consistently faced significant barriers to employment. The article emphasizes the potential of the WOTC to not only benefit employers but also to foster inclusive hiring practices and support economic growth.

The WOTC is designed to encourage the hiring of individuals from groups such as veterans, ex-felons, individuals receiving Temporary Assistance for Needy Families (TANF), and others who face significant employment challenges. By hiring from these groups, employers can claim a tax credit that can significantly reduce their federal tax liability. The credit amount varies depending on the target group and the number of hours worked by the employee, with maximum credits ranging from $2,400 to $9,600 per eligible new hire.

The article highlights that despite the potential benefits, many small businesses are unaware of the WOTC or find the process of claiming the credit to be complex and time-consuming. This is where intermediaries come into play. Intermediaries, such as workforce development organizations, staffing agencies, and tax consultants, can bridge the gap between small businesses and the WOTC by providing the necessary support and guidance.

One of the key roles of intermediaries is to raise awareness about the WOTC among small businesses. Many small business owners are focused on day-to-day operations and may not have the time or resources to stay updated on tax incentives. Intermediaries can conduct outreach and educational campaigns to inform small businesses about the WOTC and its potential benefits. This can include hosting workshops, webinars, and informational sessions, as well as providing resources and materials that explain the eligibility criteria and application process.

In addition to raising awareness, intermediaries can assist small businesses with the WOTC application process. The process of claiming the WOTC involves several steps, including completing IRS Form 8850 and submitting it to the state workforce agency within 28 days of the employee's start date. Intermediaries can help small businesses navigate this process by providing step-by-step guidance, reviewing completed forms for accuracy, and ensuring that all necessary documentation is submitted on time.

Intermediaries can also play a role in identifying and connecting small businesses with eligible candidates. Many small businesses may not have the resources or networks to reach individuals from the target groups eligible for the WOTC. Intermediaries, particularly those with connections to community organizations and workforce development programs, can help small businesses access a pool of qualified candidates who meet the WOTC criteria. This not only helps small businesses take advantage of the tax credit but also supports the employment of individuals who face barriers to entering the workforce.

The article also discusses the potential for intermediaries to provide ongoing support to small businesses that hire WOTC-eligible employees. This can include offering training and development programs to help these employees succeed in their new roles, as well as providing resources and support to small businesses to ensure that they can effectively integrate these new hires into their operations. By offering this ongoing support, intermediaries can help small businesses maximize the benefits of the WOTC while also contributing to the long-term success of their employees.

Another important aspect highlighted in the article is the role of technology in facilitating the WOTC process. Intermediaries can leverage technology solutions, such as online platforms and software tools, to streamline the application process and make it more accessible to small businesses. These tools can help automate the completion of forms, track application deadlines, and provide real-time updates on the status of WOTC claims. By embracing technology, intermediaries can make it easier for small businesses to take advantage of the WOTC and reduce the administrative burden associated with claiming the credit.

The article also touches on the broader economic and social benefits of the WOTC. By encouraging the hiring of individuals from target groups, the WOTC can help reduce unemployment and poverty rates, particularly among populations that face significant barriers to employment. This, in turn, can lead to increased economic activity and a more inclusive workforce. The article argues that intermediaries have a crucial role to play in realizing these benefits by supporting small businesses in their efforts to hire WOTC-eligible employees.

In conclusion, the article emphasizes the importance of the Work Opportunity Tax Credit as a valuable tool for small businesses and highlights the critical role that intermediaries can play in helping these businesses unlock the hidden value of the WOTC. By raising awareness, assisting with the application process, connecting small businesses with eligible candidates, providing ongoing support, and leveraging technology, intermediaries can help small businesses take advantage of this tax credit while also contributing to broader economic and social goals. The article serves as a call to action for intermediaries to step up their efforts in supporting small businesses and promoting inclusive hiring practices through the WOTC.

Read the Full Forbes Article at:
[ https://www.forbes.com/councils/forbesbusinesscouncil/2025/06/20/unlocking-hidden-value-with-the-work-opportunity-tax-credit-how-intermediaries-can-support-small-businesses/ ]