Tax Benefits of Hiring Felons

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For some time now, the Federal Government has offered tax benefits as an incentive for employers to hire people with felony convictions. Employment is essential for ex-felons to return to society. Jobs help with their rehabilitation and create opportunities for them to start a new life.

A number of laws exist to protect ex-felons from discrimination and stigma. However, they cannot ensure ex-felons are hired. Consequently, the Federal Government has created financial incentives to make the employment of ex-felons more commonplace. Such measures are necessary in persuading employers to give ex-felons a chance in their industries. One of these steps is the provision of tax benefits for hiring felons.

This approach has proven quite effective in many instances. As a result, more and more companies are opening their doors to ex-felons. Though these incentives alone will not erase the mistrust and wariness the general public has for ex-felons, tax benefits will surely help ex-felons get the second chance they need.

The Work Opportunity Tax Credit (WOTC) is a program offered by the Federal Government to give employers tax benefits for hiring ex-felons. The employer or company can enjoy the tax credits if certain requisites are met. These standards are useful in encouraging the employment of ex-felons who are the most economically disadvantaged. The following are some requisites to qualify the employer or company for the Work Opportunity Tax Credit program:

1. The ex-felon should be hired no more than one year after his release from jail, or a year after the conviction.

2. The ex-felon employee should belong to the Bureau of Labor Statistics Lower Living Standard and have an income of 70% or less on an annual basis the month the felon employee is hired.

What does the employer receive when he qualifies for the Work Opportunity Tax Credit?

1. The employer will receive a maximum tax credit of $2,400 for every adult ex-felon the employer hires.

2. Since there may be risks of theft, fraud, dishonesty or other undesirable behavior on the part of the ex-felon, the employee qualifies for a $5,000 to $25,000 bond from the government. This will minimize the hazards involved and ensure the safety of the employer’s business.

Understandably, many employers refuse to hire ex-felons due to mistrust. But employers need to realize that ex-felons are being watched and are under probation after their release. This combined with the insurance bonds stabilizes the risks involved considerably. If employing an ex-felon does not work out, you can always find someone else. So why not try to hire an ex-felon?

Employing ex-felons not only benefits employers with tax benefits, but could also benefit them with the loyalty of someone who has possibly lost all hope of finding a decent job. Good deeds are often reciprocated with loyalty and hard work. Hire an ex-felon and you will not only enjoy the tax benefits for hiring felons, but you’ll also benefit from good and loyal service. Hire ex-felons and you’ll surely get these advantages and the tax benefits!


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