By John Egan – October 6, 2022
The nonprofit investigative news outlet ProPublica recently published a scathing report on the use—or, in its estimation, misuse—of the federal Work Opportunity Tax Credit (WOTC). In light of that investigation, employers and staffing agencies may be wondering how to properly take advantage of the tax credit.
When Congress approved the Work Opportunity Tax Credit in 1996, lawmakers intended to spur the full-time hiring and retention of workers from disadvantaged backgrounds. Instead, the $2 billion program is doling out hundreds of millions of dollars per year in subsidies for temporary jobs, the ProPublica investigation found. ProPublica’s analysis of WOTC applications in nine states showed that almost one-fourth of the jobs certified for the tax credit between 2018 and 2020 were with staffing agencies.