Work Opportunity Tax Credit (WOTC): Form 5884

Form 5884

Is the Work Opportunity Tax Credit (WOTC) worth it for Venture Backed Startups? While this is a great credit, it hasn’t proven to be particularly useful for VC backed startups that we serve. Across the 500+ startups we worked with in 2020, none hired qualified veterans or felons, and exceptionally few hired summer interns that were eligible for the Work Opportunity Tax Credit. We do encourage businesses to hire veterans - at Kruze, we’ve been fortunate enough to have some great employees who have served in our nation’s military. And, we also have some military spouses on our staff as well. Based on our great experience, we encourage startups to hire veterans! 

What is the Work Opportunity Tax Credit?

This is a federal tax credit offered by the IRS that is available to startups who hired employees for underrepresented, targeted groups.  It is designed to promote workplace diversity.

Which Startups are Eligible to Claim the Work Opportunity Tax Credit?

In order to claim the credit, startups must:

  1. Apply and receive approval from the state workforce agency (SWA) and
  2. Complete, and receive approval for, the Form 8850, Pre-Screening Notice and Certification Request for the Work Opportunity Credit, on or before the day you offer the employee the job

Who is a qualifying employee of a targeted group?

While there are many targeted groups prescribed within the WOTC, the three most common are:

  • Summer Interns
  • Veterans
  • Ex-Felons

How much credit will my startup receive? 

  • Qualified Summer Interns: max $3000
  • Qualified Veterans: max $6,000-$24,000
  • Qualified Other Persons: max $6000

How Do I Apply for the Work Opportunity Tax Credit?

You can apply for the Work Opportunity Tax Credit on form 5884 and 3800, which is a part of the 1120 C-Corporation Income Tax Return, due 4/15 every year and can be extended to 10/15 every year.

Where Can I Find More Information on the Work Opportunity Tax Credit?

If you would like more information on the Work Opportunity Tax Credit , you can check out the Form 5884 section on the IRS website here.

READY TO CONNECT FOR A FREE CONSULTATION?

We are the experts at helping seed/VC-backed Delaware C-Corps with their accounting and finances!

Talk to an experienced accountant, not a generic sales person

 Kruze Consulting
Alex Janeck
 Kruze Consulting
Edith Silva
 Kruze Consulting
Ian Williams
Viz AI

$250M+ VC Funding Raised


"I had a great experience working with Kruze Consulting when we raised Series A. They know what VCs need to see, and how to present a startup’s books and finances. If you are going to raise venture capital, you need experts like Kruze."
Chris Mansi

Chris Mansi

CEO

Startup Venture Capital Assistance

With former venture capitalists on staff, our team is here to help you navigate the fundraising process and manage your board of directors

 Kruze Consulting
Scott Orn
COO | Former VC
 Kruze Consulting
Healy Jones
VP FP&A | Former VC
Pequity

Scale Remote Operations & Team


"Kruze has supported us above and beyond basic accounting needs by ensuring we have everything we need to expand and support our team wherever they may be located"
Zack Fisch

Zack Fisch

Head of Operations & Legal

Clients who have worked with Kruze have collectively raised over $15 billion in VC funding.

We set startups up for fundrising success, and know how to work with the top VCs.

 Kruze Consulting
Vanessa Kruze, CPA
Founder & CEO
Kruze Logo

Experienced team helping you

Our account management team is staffed by CPAs and accountants who have, on average, 11 years of experience.

 Kruze Consulting
Bill Hollowsky, CPA
VP of Accounting Services
 Kruze Consulting
Claudine Vantomme, CPA
Controller
 Kruze Consulting
Morgan Avery
SUT/R&D Sr. Tax Accountant
 Kruze Consulting
Beth Bassler
Controller, CPA
Protara Therapeutics

Grew from a 2-person startup to a NASDAQ listed public company.


"The Kruze team helped us grow from a 2-person startup to a NASDAQ listed public company in 2 years. We wouldn’t have gotten public without Kruze’s support. Anyone thinking of launching a startup should make Vanessa their first call!"
Jesse Shefferman

Jesse Shefferman

CEO

Kruze Logo

Get in Touch

Please help us connect with you

How can we reach you?

Our first response is typically via email, so please check your inbox.

Help us have a productive first consultation by providing some additional information.

What year was your startup incorporated?

What is your stage of funding?

(pick up from the list)

Approximately how much funding have you raised?

(please enter a dollar value such as 5000000)

Help us understand what you are looking for:

(Optional, click the ones you need)

Anything additional that you’d like to share?

Optional - if you’d like to share anything else to help us prepare for our consultation, please let us know. We are also happy to sign an NDA, just let us know.

Important Tax Dates for Startups

  Talk to a leading startup CPA