Enhance tax savings with WOTC: Hire from eligible groups, avoid pitfalls, and work with specialized advisors for compliance and benefits.
With hiring activity expected to remain high in 2025, now is the time to consider the Work Opportunity Tax Credit (WOTC). While WOTC is currently law through December 31, 2025, the credit enjoys bipartisan support and has been extended over a dozen times since 1996.
This federal incentive can deliver up to $9,600 per eligible hire, translating into significant annual tax savings for real estate firms that know how to capture it.
Who might benefit from the Work Opportunity Tax Credit
The WOTC primarily benefits real estate operators who engage in high-volume hiring for entry-level and service-oriented roles.
This federal tax credit is designed for hiring individuals from eligible groups that face significant barriers to employment, making it particularly valuable for sectors with a frequent need for this type of workforce.
Property management
Operators of multifamily, student housing, and senior living facilities are prime examples. They consistently hire for roles such as leasing agents, maintenance staff, custodians, and groundskeepers. These positions often attract individuals from WOTC-eligible groups.
Hospitality
Hotels tend to have high turnover and a continuous need for front-desk staff, housekeeping, food service, and other customer-facing roles. The hiring practices in this sector align directly with WOTC's goals.
Commercial and industrial
Less common, but still applicable, are operators of commercial properties or industrial warehouses. They may benefit from hiring for positions in property maintenance, security, or light administrative roles.
Common pitfalls for claiming the WOTC credit
For real estate entities, the WOTC is a powerful incentive, but the application process can be complex and full of pitfalls that can lead to denials:
Missing the 28-day deadline
This is the most common and absolute reason for a denial. You must submit the required forms to the state workforce agency within 28 calendar days of an employee’s start date. There are no extensions or grace periods for this deadline.
Incomplete or inaccurate documentation
The WOTC process requires meticulous paperwork. Failing to correctly complete IRS Form 8850 and ETA Form 9061, or providing inconsistent information, will result in the application being denied.
Failing to screen all new hires
Eligibility for the WOTC is determined by an employee belonging to one of several eligible groups. Many companies fail to implement a standardized screening process for all new hires, which means they miss eligible candidates and leave potential credits on the table.
Getting the most out of WOTC
Real estate clients often ask, “Isn’t my payroll provider already handling this?” While payroll partners are essential for managing employee data, they’re not always equipped to unlock the full potential of tax credit programs like WOTC.
Consider working with tax advisors who focus exclusively on tax credits and incentives. They can help you stay ahead of regulatory changes and proactively embed WOTC into your hiring strategy, making sure every eligible hire is identified.
How CLA can help
Our industry consultants use their deep expertise and strategic insight to go far beyond just processing forms.
We help position real estate firms to capture the credit strategically, using dedicated, audited workflows to enable timely filing and full compliance. Through advanced screening and tracking, our team helps you capture every available dollar, amplifying the benefit to your bottom line.
To learn more about how CLA can help you implement a successful WOTC strategy, visit our website or contact your CLA advisor for a personalized consultation.