Employers in Rural Communities May be Eligible for Tax Credit

• January 29, 2019
• Amanda Garnett

The Work Opportunity Tax Credit (WOTC) is a tax credit that allows employers to reduce their federal tax liability for every certified member of a targeted group that they hire.  Historically, we have not seen a lot of financial institutions take advantage of this credit because some of the main groups targeted include ex-felons and the long-term unemployed. 

But there is one key group that for-profit financial institutions may want to consider: individuals living within one of the federally-designated rural renewal counties or empowerment zones.  Some financial institutions may find they are already located within these areas without even knowing it.  For example, here in Illinois 18 out of our 102 counties are considered to be rural renewal counties. 

To be eligible for the credit, the employee would need to be newly hired.  They would have to be between 18 and 39 years of age and live in one of the specified areas.  Any type of job is eligible including temporary or part-time work. 

The general business credit earned can be up to $2,400 per person hired.  There are a series of IRS and state forms that must be completed to apply for the credits and they must be submitted within 28 days of hiring a new employee.  CLA has a designated team that assists employers in completing the necessary documents. 

WOTC includes other targeted groups such as disabled veterans and recipients of food stamps that financial institutions may also periodically hire. 

Please contact our WOTC team for more information on claiming this credit. 

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