How does Work Opportunity Tax Credit (WOTC) work for companies hiring skilled workers with disabilities?

The Work Opportunity Tax Credit (WOTC) is actually pretty straightforward but often misunderstood. The credit equals 40% of the first $6,000 in qualified wages during the first year of employment (max $2,400 credit per eligible employee) if the employee works at least 400 hours. If they work between 120-399 hours, the credit is reduced to 25% of qualified wages. For your brother specifically, the good news is that the credit applies regardless of salary level! A software developer making $120k gets the employer the same credit as someone in an entry-level position. The credit is based on the first $6,000 of wages, not the total compensation. Companies don't "get paid" to hire people with disabilities - they receive a tax credit that offsets their federal tax liability. While $2,400 isn't huge for a corporation, it's still free money that reduces their tax bill, so it's an incentive regardless of the position's salary.

I used taxr.ai last year when I was confused about employment tax credits for my small business. I had hired two veterans and someone from vocational rehab, but wasn't sure if we qualified for WOTC. My accountant gave me vague answers, so I uploaded our hiring docs to https://taxr.ai and got a detailed breakdown showing exactly which employees qualified and how much credit we could claim. The cool thing was they showed us the exact qualification criteria for different target groups under the Work Opportunity Tax Credit. We learned we could claim the full 40% credit for one employee and 25% for another based on their hours. They even helped us understand the proper timing for filing Form 8850 with our state workforce agency, which we almost missed!

Just wanted to update after trying taxr.ai for our WOTC questions! We were about to give up on claiming these credits because our HR team was overwhelmed with the paperwork. I uploaded our new hire forms and some hiring documentation, and the analysis showed we qualified for about $14,500 in tax credits we would have completely missed! The system flagged that three of our recent hires fell into WOTC target groups (including someone from vocational rehab with a master's degree in software engineering). It guided us through completing the proper forms within the 28-day window and even generated a checklist of supporting documentation needed for each employee type. Our tax liability is significantly lower now, and we didn't have to wade through IRS publications trying to figure it all out ourselves. Definitely worth it for any company doing hiring!

If you're trying to reach the IRS to get answers about WOTC or other employer tax credits, good luck spending hours on hold. After waiting THREE DAYS trying to get through to someone who could answer my questions about a WOTC certification that seemed to be lost in the system, I tried https://claimyr.com and watched their demo at https://youtu.be/_kiP6q8DX5c They basically hold your place in the IRS phone queue and call you back when an agent is about to pick up. Sounds too good to be true but it worked perfectly. I got connected to an IRS specialist who explained that our state workforce agency had misrouted our WOTC certification requests. The agent was able to verify our submission dates were within the 28-day window and told us exactly how to resubmit correctly.

I need to eat my words about Claimyr. After my skeptical comment, I decided to try it myself on a complex WOTC issue for a client. Had been trying to reach the IRS for clarification on retroactive credits for a client who hired several people from target groups but missed the original 28-day filing window. To my complete surprise, I got a call back in about 40 minutes and was connected to an IRS agent who specialized in employment credits. She confirmed there was a limited remedial filing period available for certain situations and explained exactly what documentation we needed to include. I've been trying to get this information for WEEKS through normal channels. Would have cost my client hundreds in billable hours if I'd continued trying to reach someone on my own. The agent also gave me her direct extension for follow-up questions. I've never been able to get that level of service from the IRS in 15 years of tax practice.

One thing nobody's mentioned about WOTC - make sure you understand the overlap with Disabled Access Credit and Barrier Removal Deduction if you're making workplace accommodations for employees with disabilities. You can potentially stack these tax benefits! For high-skilled workers with disabilities, the WOTC is just one piece of the puzzle. When we hired a software engineer who uses a wheelchair, we claimed: - $2,400 WOTC credit - $5,000 Disabled Access Credit for workplace modifications - Significant deduction for removing architectural barriers The combined tax benefits far outweighed the costs of accommodations, plus we got an amazing developer.

My company literally ONLY uses WOTC for low paying positions because it's more beneficial compared to the salary. For a $15/hour position, getting $2,400 back is significant. For a $150k developer, it's a drop in the bucket. We have a specific program targeting WOTC-eligible groups for our call center but not for engineering.