Start a WOTC Tax Credit Administration Service

1. 1

   Learn the WOTC rules and target groups

   The Work Opportunity Tax Credit is a federal credit for employers who hire from specific target groups that face barriers to employment (certain veterans, SNAP recipients, long-term unemployed, ex-felons, SSI recipients, vocational rehabilitation referrals, designated community residents, and long-term TANF recipients). Credit amounts vary by target group and hours worked. You must know the categories and the calculation tiers cold, because that knowledge is what you are selling.

2. 2

   Master the 28-day deadline

   The single most important rule: IRS Form 8850 pre-screening must be completed and, with ETA Form 9061, filed with the state workforce agency within 28 days of the employee's start date. Miss the window and the credit is permanently forfeited. Your entire process exists to make sure that clock is never missed, which is exactly why employers cannot reliably do this themselves.

3. 3

   Set up your screening engine

   License a WOTC screening platform or partner with an established WOTC vendor (such as Walton Management, ADP WOTC, or a comparable service) that automates the 8850 questionnaire, filing, and credit tracking, and integrates with common ATS platforms. Building the process manually is possible but the platform pays for itself in accuracy and speed at volume.

4. 4

   Integrate screening into the hiring flow

   The screening questionnaire has to run at application or day-one onboarding, before the clock starts, and it has to run for every hire, not a self-selected few. Embedding it in the client's existing workflow is the difference between capturing most eligible credits and capturing almost none. Make it invisible and automatic.

5. 5

   File, track, and coordinate certification

   Submit Form 8850 and ETA 9061 to the state workforce agency inside the window, then track each submission through certification or denial and maintain a status log the client can see any time. Certifications can take months, so organized tracking is essential to prove the value you are delivering.

6. 6

   Report and hand off to the client's tax preparer

   Deliver quarterly and annual reporting on credits captured, pending certifications, and estimated savings, and work with the client's CPA so certified credits are properly claimed on the federal return (the credit is the employer's, claimed via IRS Form 5884). You administer the capture; the employer's tax preparer claims it. Be crystal clear about that boundary, because you are not filing their taxes.

7. 7

   Price on a fee-plus-percentage model

   The common structure is a per-screened-hire fee for the administration work plus a percentage of credits actually captured, invoiced as certifications process. That aligns your income with the dollars you recover and makes the business case obvious: your fee comes out of money the client would otherwise never have seen.

Do not take our word for the money. Put your own numbers in and see what this idea has to earn before it works. Free, instant, no account needed.

Best for: HR, payroll, or process-minded operators who can run time-sensitive paperwork at volume without errors

Not for: Not for anyone careless with deadlines; a missed 28-day filing destroys the value and your credibility in one stroke. Not for people who want to blur into tax preparation, which belongs to the client's CPA. And not for someone unwilling to screen every hire and track certifications for months, because the discipline of running the full process at volume is the whole service.