How to Get Paid to Hire Employees

Introduction

Hiring new employees is a major expense for any business. But what if you could actually get paid to hire certain employees? It’s not a dream—it’s a real opportunity known as the Work Opportunity Tax Credit (WOTC).

In a recent discussion with Marcy Alfrejd, an expert in this field, we explored how employers can take advantage of this federal tax credit to offset the costs of onboarding new employees. Here’s what you need to know.

What is the Work Opportunity Tax Credit (WOTC)?

The Work Opportunity Tax Credit is a federal tax credit available to employers for hiring individuals from specific targeted groups who face significant barriers to employment. You can find a complete list of groups on the IRS website.

Substantial Financial Benefits

From Marcy’s experience, she has seen an average of $800 credit per employee that qualifies. In one case, she saw an employer receive the max of $9,600 for someone they hired.

High Turnover Industries Benefit More

This is a huge opportunity for logistics companies specifically because this is an industry with high turnover rates. Since you are constantly recruiting and onboarding new staff, the potential for tax credits accumulates quickly.

Streamlined Application Process

The process to find out if you qualify for these credits is straightforward, though the paperwork can initially seem overwhelming. Employers can ease this burden by using services offered by payroll companies, like Paychex, which aid in the application process.

Steps to Maximize Your Benefits

1. Always Apply - as you might guess, employees may not always disclose their eligibility. So, Marcy’s advice is to apply for the credit for every new hire. Better to over-apply than miss out on potential credits.

2. Use IRS Resources - The IRS website has a comprehensive guide on WOTC, including targeted group descriptions and the application process. The form to apply is IRS form 8850.

3. Leverage Professional Services - Employers can benefit from collaborating with CPAs or payroll companies that handle WOTC applications. These professionals ensure that you comply with IRS guidelines, making the process smoother.

Conclusion

Incorporating these strategies can significantly lower your cost per hire by ensuring more applicants complete their applications. Making your forms mobile-friendly, following up methodically, and engaging with potential hires before asking them to complete lengthy forms can make a huge difference.

Happy hiring!