03.10.15 |
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Making the Most of Hiring and Employment Incentives

Help WantedEmployment rates and economic success go hand in hand.  Whether it is at the federal, state, or municipal level, economic success is inexorably tied to employment rates.

It is no surprise that the government makes an effort to incentivize hiring and employment retention.  And these incentives aren’t just good for government they also help businesses lower their tax rate, which offsets hiring and retention costs.

To help you make the most of hiring and employment incentives for which your company may be eligible, employers should be thinking about these questions:

Who are you hiring?

Government agencies offer incentives to stimulate hiring within certain targeted groups or demographic areas.  For example, consider the Work Opportunity Tax Credit (WOTC).

The United States Department of Labor defines those eligible for the WOTC as “groups who have consistently faced significant barriers to employment.”  This list of eligible groups includes unemployed veterans, food stamp recipients, ex-felons and others.

Companies that hired employees eligible for the WOTC program in 2014 now have more time to claim the credits.  A new IRS notice informs employers that have hired members of targeted groups under WOTC, including qualified veterans, between January 1, 2014 and January 1, 2015 (i.e. hires during the 2014 hiatus), that they have until April 30, 2015 to complete and submit Form 8850 to the applicable state agencies.

Where are you located?

Hiring and employment incentives can also be used to stimulate economic growth within specific geographic areas called Federal Empowerment Zones, which are areas distressed by poverty and high unemployment.

Federal Empowerment Zones can be rural or urban areas in need of economic stimulus.  In order to spur economic growth, the Department of Housing and Urban Development (HUD) offers incentives to businesses that employ residents of an empowerment zone.

Employees who qualify must live and work within the same empowerment zone as their employer.[1]  One exception to this rule is in Washington D.C., where qualified employees can live anywhere within the District of Colombia.[2]

Hiring specialized talent?

Hiring new employees is an important part of expanding a business and generating economic growth.  While incentives are intended to help companies offset hiring costs, they can also provide a platform for creating more specialized, higher paid positions that bring in new skill sets and expertise.

For example, the state of Georgia offers a variety of incentives for businesses, and job credits for as much as $4,000 in annual tax savings per job for up to five years.[3]  The Georgia Job Tax Credit is designed to spur company expansion by offering credits for each new position created.  Businesses that qualify for these credits do so based on the number and location of jobs created.  The Georgia Quality Jobs Tax Credit is designed to incentivize the creation of higher-paying jobs.

How can I make the government my ally?

As your business grows, hiring and employment incentives are increasingly important to help offset tax liability when it comes to  recruiting, hiring and training costs associated with expansion, so be aware of the tax credits that could benefit your business.

For more information on how ADP can help you capture the business incentives that your business may be eligible for, see ADP’s 2015 Tax Credits webinar and the 5 Business Tax Credit Types to Consider in 2015 blog post.

Learn More About ADP SmartCompliance® Tax Credits


[1] http://www.irs.gov/pub/irs-prior/p954–2004.pdf

[2] http://www.irs.gov/pub/irs-prior/p954–2004.pdf

[3] http://www.georgia.org/competitive-advantages/tax-credits/job-credit/




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