Don’t miss out on the work opportunity tax credit

By Brian Ravencraft

If you are looking to hire new team members for your farming/agribusiness operation, you should know that a valuable tax credit has been extended through 2025. This is a credit for employers that hire individuals from one or more targeted groups. This tax credit is known as the Work Opportunity Tax Credit (WOTC) and it presents a credit worth as much as $2,400 for each eligible employee. For certain veterans, the credit can be even higher — up to $4,800, $5,600 or $9,600, and for “long-term family assistance recipients,” the amount caps out at $9,000. 

Employees who qualify for the credit must begin working for the employer before Jan. 1, 2026. Again, these employees must come from a targeted group. Here is a listing of those groups: 

• Qualified veterans,

• Qualified ex-felons,

• Designated community residents,

• Vocational rehabilitation referrals,

• Qualified summer youth employees,

• Qualified members of families in the Supplemental Nutritional Assistance Program (SNAP),

• Qualified Supplemental Security Income recipients,

• Long-term family assistance recipients, and long-term unemployed individuals.

• Qualified members of families that receive assistance under the Temporary Assistance for Needy Families program.

Some of the other guidelines include the fact that the employee must work a minimum of 120 hours. And, unfortunately for family operations, if the employee is related to the employer, the credit is not an option. This also goes for employees you may have employed in the past that you bring back on board. 

I am just touching the tip of the iceberg when it comes to qualifications and the amounts that are offered through this valuable credit. My main goal in this article was to make you aware of this credit, as I know most organizations are actively hiring. I encourage you to talk with your accountant about this credit. Don’t have an accountant to turn to? Reach out to me. I would be happy to help. 

Brian E. Ravencraft, CPA, CGMA is a Principal with Holbrook & Manter, CPAs. Brian has been with Holbrook & Manter since 1995, primarily focusing on the areas of Tax Consulting and Management Advisory Services within several firm service areas, focusing on agri-business and closely held businesses and their owners. Holbrook & Manter is a professional services firm founded in 1919 and we are unique in that we offer the resources of a large firm without compromising the focused and responsive personal attention that each client deserves. You can reach Brian through www.agribusinessaccounting.com or www.HolbrookManter.com.