Leveraging Tax Credits for Hiring refers to the strategic use of available tax credits to reduce the overall tax liability of a business when it hires new employees.
Tax credits can be offered by federal, state, or local governments as incentives to encourage businesses to create jobs, especially in targeted areas or for specific demographics. Businesses can claim these credits when they meet certain criteria, such as hiring individuals from specific groups like veterans, long-term unemployed, or residents of economically disadvantaged areas.
For example, the Work Opportunity Tax Credit (WOTC) allows employers to receive a tax credit for hiring individuals from certain target groups who face significant barriers to employment. By effectively leveraging these tax credits, a business can not only lower its tax bill but also support community development and workforce diversity.
To maximize benefits, companies should maintain accurate records of hiring practices and be aware of the eligibility requirements for each tax credit program they wish to utilize.
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