The WOTC Credit: A Hidden Tax Break for Restaurants
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The Work Opportunity Tax Credit (WOTC) is one of the most overlooked benefits for restaurant owners. With high turnover and frequent hiring, restaurants are uniquely positioned to take advantage of it.
What Is WOTC?
A federal tax credit available for hiring employees from certain target groups, including:
- Veterans
- SNAP recipients
- Long-term unemployed
- Other qualified groups
How Much Is It Worth?
- Up to $2,400 per eligible new hire
- For veterans with service-related disabilities: up to $9,600
How to Qualify
- Pre-screen new hires using IRS Form 8850
- Submit certification request to your state workforce agency within 28 days of hire
- Claim the credit when filing your tax return
Example
A restaurant hiring 25 employees in a year, with 10 qualifying for the $2,400 credit, could save $24,000 in taxes.
The Bottom Line
Restaurants are labor-heavy businesses. Taking advantage of credits like WOTC can directly improve margins and free up cash for growth.
Don’t leave money on the table
Running a restaurant? Let’s review your hiring process and see if you qualify for the WOTC credit.