Staffing is a never-ending challenge for restaurants. In a post pandemic world troubled with worker shortages and supply chain issues, restaurants are struggling more than ever before. Budget constraints limit the usual solutions of better pay and more benefits, leaving restaurants to find more creative ways to protect their bottom line while meeting their staffing needs. Enter the sweet spot – The Work Opportunity Tax Credit.
Targeted WOTC groups
The Work Opportunity Tax Credit (WOTC) is a federal tax credit that acts as an incentive for employers to hire employees from specific target groups, including workers from families who receive government assistance, former felons, qualified veterans, workers who live in targeted areas, people with disabilities, SSI recipients, the long-term unemployed and summer youths.
Individuals who qualify for WOTC
IV-A Recipients are individuals who are members of families receiving assistance from state programs funded under part A of title IV of the Social Security Act relating to Temporary Assistance for Needy Families (TANF). The employee needs to have received assistance for nine months out of the 18 months before hiring.
Qualified veterans are individuals who were on active duty in the U.S. Armed Forces (other than for training) for more than 180 days, ending more than 60 days before the hiring date and are in one of certain categories. The categories are members of families who received assistance under the Supplemental Nutrition Assistance Program (SNAP) for at least three months during the 12 months ending on the hiring date, veterans entitled to compensation for a service-connected disability and have a hiring date within one year after his or her discharge or release from active duty, veterans entitled to compensation for a service-connected disability who were unemployed for at least six months during the 12 months preceding the hiring date, veterans unemployed for at least four weeks (but less than six months) during the 12 months ending with the hiring date, or veterans unemployed for at least six months during the 12 months ending with the hiring date.
Qualified former felons are those you’ve hired within a year after they’ve been convicted of a felony or been released from prison for a felony.
Designated Community Residents (DCR) are workers who are between 18 and 40 who live in an Empowerment Zone (EZ), enterprise community (EC), renewal community (RC), or a Rural Renewal County (RRC). For these individuals wages paid when the employee is not living in one of those areas do not qualify so be sure to keep track of their current address.
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