Tax Savings for Real Estate with the Work Opportunity Tax Credit (WOTC)
- R. Levi Smith III
- Oct 28
- 2 min read
The Work Opportunity Tax Credit (WOTC) is a valuable but often overlooked tax incentive for real estate firms.
By hiring individuals from certain target groups, owners and operators can reduce federal income tax liability while expanding their workforce and supporting local communities.
What is the WOTC?
The WOTC is a federal program that provides tax credits to employers who hire from specific groups facing employment barriers. These include veterans, individuals receiving public assistance, long-term unemployed, and others.
How Much Can You Save?
The credit can range from $1,200 to $9,600 per qualified employee, depending on the target group and number of hours worked. For real estate businesses with large or seasonal workforces — such as property management, construction, or hospitality — these credits can add up quickly.
Key Steps to Claiming WOTC
Identify eligible new hires during the application process.
Submit IRS Form 8850 to your state workforce agency within 28 days of the employee’s start date.
Keep detailed records of hours worked and wages paid to calculate the credit accurately.
Claim the credit against your federal income tax liability.
Why It Matters for Real Estate
Real estate companies often employ a wide range of staff — from maintenance crews and leasing agents to security and hospitality workers. Many of these positions may qualify for WOTC credits. Leveraging this program not only reduces taxes but also helps firms attract and retain talent.
Bottom Line
The Work Opportunity Tax Credit is a practical way for real estate businesses to reduce tax liability while making a positive social impact. By incorporating WOTC screening into your hiring process, you can capture savings that directly improve your bottom line.
Consider reviewing your hiring practices to see where WOTC credits may apply.
This is not an offer or solicitation to buy or sell any securities.
Some of the risks related to investing in commercial real estate include, but are not limited to: market risks such as local property supply and demand conditions; tenants’ inability to pay rent; tenant turnover; inflation and other increases in operating costs; adverse changes in laws and regulations; relative illiquidity of real estate investments; changing market demographics; acts of God such as earthquakes, floods or other uninsured losses; interest rate fluctuations; and availability of financing. Investments in real estate or real estate securities are not guaranteed and have the potential to suffer losses.
This site provides brief and general description of certain tax strategies including Opportunity Zones, Sections 1031, 1033, and 721 Exchanges. There are various risks related to purchasing securities as part of any planning strategy, including tax complexity, illiquidity and restrictions on ownership and transfer. RCX Capital Group and its representatives do not provide Tax Advice. Because each prospective investor’s tax implications are different, all prospective investors should consult with their tax advisors.
