May 22, 2025
What Is WOTC? A Guide to the Work Opportunity Tax Credit for Employers
If you’re hiring employees and not taking advantage of the Work Opportunity Tax Credit (WOTC), you could be leaving tens—or even hundreds—of thousands of dollars on the table each year.
This powerful federal hiring tax credit is designed to encourage businesses to hire individuals from targeted groups who have historically faced barriers to employment. But despite the potential savings, many employers don’t know they qualify—or struggle with the paperwork and deadlines involved.
In this article, we’ll break down what WOTC is, who qualifies, and how your business can easily take advantage of this incentive.
What Is the Work Opportunity Tax Credit (WOTC)?
The Work Opportunity Tax Credit (WOTC) is a federal tax incentive available to employers who hire individuals from certain target groups. These groups include veterans, individuals receiving government assistance, people with prior felony convictions, and others who may face challenges in the job market.
The credit amount can range from $2,400 to over $9,600 per eligible new hire, depending on the individual’s background and hours worked.
Why WOTC Matters to Your Business
WOTC isn’t just a tax break—it’s a smart hiring strategy. Businesses that regularly claim WOTC can save $50,000–$350,000 or more annually, depending on their hiring volume.
Key benefits of WOTC:
Offset rising hiring and retention costs
Increase ROI on every new employee
Support second-chance hiring and community employment goals
Enhance your tax planning strategy
Who Qualifies for WOTC?
WOTC target groups include (but are not limited to):
Veterans
SNAP (food stamp) recipients
TANF recipients
Long-term unemployed individuals
Ex-felons
Vocational rehab referrals
Supplemental Security Income (SSI) recipients
Summer youth employees (in designated zones)
You don’t need to guess who qualifies—Canary helps automate this process through a brief, applicant-friendly pre-hire survey.
How to Claim the WOTC
To claim WOTC, employers must:
Have the job candidate complete IRS Form 8850 before or on the day of the job offer.
Submit the form to their state workforce agency within 28 days of the employee’s start date.
Once certified, the business can claim the tax credit on their income tax return.
Sounds complex? That’s where Canary comes in.
Canary Makes WOTC Easy
Canary’s platform simplifies and automates the entire WOTC process:
Built-in eligibility screening during the application flow
Auto-completion and e-signature of IRS forms
Timely submission to state agencies
Real-time notifications when a hire qualifies
Centralized dashboard to track credits
Plus, we offer this service at no upfront cost and no risk—we only earn when you save.
Get Started Today
If you're hiring, you could be earning. Whether you're in food service, retail, healthcare, or another high-turnover industry, WOTC can unlock thousands in savings per hire.
✅ Ready to learn more? Book a demo or join our upcoming free webinar to discover how Canary helps you claim every available hiring tax credit.
