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Newsrooms Should Harness the Hiring Incentive of the WOTC

By April 19, 2023April 20th, 2023Resources

Newsrooms want to hire veterans. Or they should, anyway. 

Hiring veterans is a great strategy for employers: allowing them to gain high performing employees who are dedicated with an array of skills. Companies are incentivized to hire. 

This is important to know. It singles us out, but if you know this fact, you may as well harness the information and use it to your advantage. 

United States military veterans can leverage their service when applying to jobs thanks to the Work Opportunity Tax Credit. Photo by Todd Trapani on Unsplash.

Whether a service member put in two years or 46 years of service, newsrooms are given what is called a Work Opportunity Tax Credit (WOTC) for hiring them as “targeted groups who have faced significant barriers to employment.” That credit can be as much as $9,600 per veteran hired.

The credit available starts at $2,400 and can increase depending on the group and wages paid to the employee in the first year of employment. According to the U.S. Department of Labor, it can increase by 40% of the employee’s qualified wages made in the first year, given a 400+ hours first year of employment.

According to the Internal Revenue Service, the Federal tax credit incentivizes increased diversity within the workplace. We know that diversity impacts the caliber of journalism. This general business credit, provided under section 51 of the Internal Revenue Code, The credit is available to employers up until December 31, 2025, under the Consolidated Appropriations Act, 2021.

Veterans aren’t the only ones who qualify a company for the credit. A newsroom who hires any person within one of the designated targeted groups could receive a federal tax credit per individual brought on to work.

Those in the targeted groups include:

  • Qualified recipients of Temporary Assistance to Needy Families.
  • Qualified veterans receiving Food Stamps or qualified veterans with a service-connected disability who:
    • have a hiring date which is not more than one year after having been discharged or released from active duty OR
    • have aggregate periods of unemployment during the one-year period ending on the hiring date that equal or exceed six months.
  • Ex-felons hired no later than one year after conviction or release from prison.
  • Designated Community Resident – an individual who has attained ages 18 but not 40 on the hiring date who resides in an Empowerment Zone, or Rural Renewal County.
  • Vocational rehabilitation referrals, including Ticket Holders with an individual work plan developed and implemented by an Employment Network.
  • Qualified summer youth ages 16 through 17 who reside in an Empowerment Zone.
  • Qualified Food Stamp recipients ages 18 but not 40 on the hiring date.
  • Qualified recipients of Supplemental Security Income.
  • Long-term family assistance recipients.
  • Qualified Long-Term Unemployment Recipients.

Unlike your age, marital status, and proposed days off in the future, you should reveal your inclusion as a member of the targeted group up front to potential employers because you and they must complete some paperwork on the day or before you’re offered the job for the newsroom to qualify for the credit. 

There are also plenty of ways to connect targeted group members seeking employment to the companies willing and looking to hire them. The American Job Center assists interested employers in recruiting, hosting job fairs, doing skills assessment, and providing support during the transition to the new job.  

A state workforce agency such as the military’s Vocational Rehabilitation or Veterans Administration can predetermine a job seeker as qualifying as part of a WOTC targeted group.  The agency can note this determination with a Conditional Certification, ETA Form 9062. This cuts out a significant step in the process by alerting employers seeking to grow their workforce to the availability of the tax credit and providing a means for employers to request a WOTC certification for the prospective new hire. 

Both taxable and some tax-exempt U.S. employers are eligible to claim the credit. The difference is that taxable employers claim the WOTC against income taxes, while eligible tax-exempt employers can claim the WOTC only against payroll taxes and only for wages paid to qualifying veterans.

Veterans who served anywhere between two to 46 years can be considered a part of a targeted group eligible for a tax credit when hired by a company. Photo by Syndey Rae on Unsplash.

While I did say you, I wasn’t addressing all veterans who may be reading this piece. Not every veteran may qualify for this perk with their new employer, unfortunately. The IRS defines a qualified veteran as: 

  • A veteran who is a member of a family receiving assistance under the Supplemental Nutrition Assistance Program, or food stamps, for at least a three-month period during the 15-month period ending on the employee’s hiring date
  • A veteran who was unemployed for periods of time totaling between four weeks to six months in the one-year period ending on the veteran’s hiring date
  • A veteran who was unemployed for periods of time totaling at between six months in the previous year ending on the hiring date
  • A veteran who is entitled to compensation for a service-connected disability and hired not more than one year after their date of discharge or when they were released from active duty in the U.S. Armed Forces or
  • A military veteran who is entitled to compensation for a service-connected disability of any rating and unemployed for periods of time totaling at least six months in the one-year period ending on their hiring date.

A veteran’s spouse may also qualify for the credit, thanks to the Military Spouse Hiring Act of 2022. It hasn’t passed just yet, but if the act goes into effect, the Work Opportunity Tax Credit would include military spouses. According to the current law, the tax credit only extends coverage to qualified military veterans as members of those targeted groups, not military spouses.

Those factors which may make all of this null and void are the limitations: 

  • A qualifying employee must work at least 120 hours – or about three solid, full-time workweeks – during their first year with the company 
  • The tax credit is limited to W-2 employees and does not apply to 1099 or contract workers. 
  • Nepotism excludes a qualified veteran from earning their company the tax credit, as family members hired do not qualify. Business owners also cannot qualify themselves as WOTC employees. 

All things considered, the tax credit gives veterans another (yes, another) leg up on their competition when going out for their dream jobs – or just a job that’ll bring home the bacon. It is important to research the steps necessary to apply for the tax credit and to involve your employer. Consider it another page on your ILoveMe Book. Make an effort to scrape up the proper forms and bring up the tax credit if your employer doesn’t first. You’ll actually be getting them paid for paying you.

Noelle Wiehe, the author of this article, joined the U.S. Army as an enlisted public affairs soldier. She followed her dream of telling the military’s story from outside the uniform, working in downtown Savannah as editor-in-chief at Connect Savannah before landing a fellowship through Military Veterans in Journalism to work for Coffee or Die Magazine. She is now seeking to continue her journalism passion. Connect with her on LinkedIn!