Practice Areas

TAX TIME: How Employers Can Save on Taxes By Hiring the RIGHT Applicant

April 2013

By: Anthony J. Caruso, Esq.

Everyone wants to save on taxes, including employers. Under federal law, the Work Opportunity Tax Credit, an employer may qualify for a federal tax credit for hiring certain individuals. In fact, there is NO limit on the number of individuals that an employer can hire to get the tax credits.

The purpose of the law is to encourage employers to hire certain individuals from groups who have difficulties in securing employment.

Who can the employer hire?

  • Veterans
  • Temporary assistance for needy families recipients
  • Food stamp recipients
  • Designated community residents (living in empowerment zones or rural renewal counties)
  • Vocational rehabilitation referral
  • Ex-felons
  • Supplemental security income recipients
  • Summer youth employee (living in empowerment zones)

The TAX CREDIT depends on the following:

  • The group from which the individual was hired.
  • The number of hours worked and wages earned by the individuals in the first year (and in same cases 2 years of employment).
  • Completion and filing of the appropriate forms with the Illinois Department of Employment Security.
  • Forms must be submitted within 28 calendar days of the employee's start date.

The SAVINGS to the employer by these tax credits can be HUGE (from $1,200 to $9,600 maximum credit) depending upon the individual hired.

If you have any questions or concerns about this topic or any other questions related to employment, please call Attorney Anthony J. Caruso of Wessels Sherman's St. Charles, Illinois office at (630) 377-1554 or e-mail ancaruso@wesselssherman.com.