Workforce insights for employers and job seekers.

What Is the Work Opportunity Tax Credit (WOTC), and How Can Texas Employers Use It?

If you hire workers in Texas and you've never heard of the Work Opportunity Tax Credit, you may have left thousands of dollars on the table. Here's what you need to know.

What Is the WOTC?

The Work Opportunity Tax Credit (WOTC) is a federal tax incentive administered by the IRS and the U.S. Department of Labor. It rewards employers who hire individuals from specific groups who have historically faced significant barriers to employment.

In plain terms: the federal government pays you, through a tax credit, to give certain people a job. Credits range from $1,500 to $9,600 per qualifying hire depending on the employee's target group and hours worked. This is not a deduction, it's a dollar-for-dollar reduction in your federal tax liability. Employers can claim WOTC for an unlimited number of qualifying hires; there is no cap.

Who Qualifies?

The IRS designates ten target groups for WOTC eligibility. The most relevant for employers working with a second chance staffing partner include:

• Ex-felons hired within one year of conviction or release: up to $9,600
• Long-term TANF (welfare) recipients: up to $9,600
• Veterans with service-connected disabilities: up to $5,600
• Individuals referred by vocational rehabilitation programs: up to $2,400
• Summer youth employees from low-income areas: up to $2,400
• Short-term TANF and SSI recipients: up to $1,500

For formerly incarcerated individuals, the maximum credit is $2,400 for employees who work at least 120 hours, and up to $9,600 for long-term family assistance recipients. The employee must be hired within one year of their release or conviction date.

How Much Can You Actually Save?

For most target groups, the credit equals 40% of first-year wages up to $6,000, a maximum of $2,400 per hire. For long-term family assistance recipients, it's 40% of first-year wages up to $10,000, plus 50% of second-year wages up to $10,000, totaling up to $9,000.

For a company placing 20 qualifying hires in a year, that's a potential $48,000 reduction in federal taxes. For 50 hires, $120,000 or more. As an example: a Dallas warehouse operation hiring 15 returning citizens at $15/hour, each working full-time for a year, could see $2,400 × 15 = $36,000 in federal tax credits in a single year.

How Do You Apply?

• Complete IRS Form 8850 on or before the day a job offer is made.
• Submit to your State Workforce Agency within 28 days. In Texas, this is the Texas Workforce Commission (TWC). Missing this window disqualifies the hire.
• Receive your certification once the TWC reviews and approves the application.
• Claim the credit on your federal tax return using IRS Form 5884.

Why This Matters Beyond the Tax Savings

Employers who embrace second chance hiring consistently report strong outcomes. Returning citizens are often among the most motivated and loyal employees in the workforce, precisely because they understand the value of a real opportunity. Navigating WOTC paperwork alongside high-volume hiring is a lot to manage on your own, which is exactly where a staffing partner who tracks eligibility and filing deadlines for you becomes useful.

Reducing Turnover: How Transportation Support Improves Retention

Transportation is one of the most overlooked factors in employee retention, especially for people transitioning back into the workforce after a difficult chapter.

A second chance staffing model built around wraparound support treats transportation as core to the job, not an afterthought. When employees have reliable transportation to and from work, call-offs and no-shows drop, and turnover follows.

This matters most for individuals transitioning back into the workforce after incarceration, where transportation is frequently the single biggest logistical barrier standing between someone and a stable job. Addressing it directly, rather than assuming employees will figure it out on their own, creates an environment that supports actual job retention instead of just initial placement.

For employers, the result is straightforward: fewer missed shifts, more consistent staffing, and a workforce that shows up because the barriers that would normally cause them to fall out of the pipeline have already been removed.

Job Seeker Resource Hub: What BPrep Services Actually Provides

If you're looking for work but facing obstacles due to past experiences, here's a plain rundown of what's actually available to you.

BPrep Services, headquartered at 110 W Randol Mill Rd, Suite 220-1, Arlington, TX 76011, is a staffing agency built specifically around second chance employment. That means the support goes beyond simply matching you to an open role.

• Job placement across warehouse, call center, banking, event staffing, and security roles.
• Transportation to and from work, which plays a direct role in helping people stay employed once they're placed.
• Community outreach and transition resources for individuals rebuilding after incarceration.

If you need job assistance, or know someone who does, this is the kind of support to expect: guidance, transportation, and a recruiter who stays involved after your first day, not a one-time placement and nothing else.

Empowering Single Parents With Real Work-From-Home Opportunities

Being a single parent means carrying the weight of two roles at once: caretaker and provider. Traditional full-time roles often make it nearly impossible to balance both, between school drop-offs, sick days, and childcare gaps.

Remote work changes that equation. It creates breathing room for parents to earn steady income while staying connected to their families.

Work-From-Home Job Placement

Roles in customer service, call centers, collections, help desk, and administrative support, all remote-friendly.

Transportation and Resources When On-Site Is Required

For hybrid or occasional in-person roles, transportation assistance removes another barrier to employment.

A Second Chance Mindset

Support extends to anyone rebuilding after a major life change: single parents, returning caregivers, veterans, and anyone who needs a fresh start.