WOTC and Federal Bonding: A Plain-English Guide
Two federal programs cut the financial risk of a fair-chance hire. Here is what each one does and how to claim it.
The Work Opportunity Tax Credit
WOTC is a federal tax credit for hiring from targeted groups, including people convicted of a felony who are hired within a year of conviction or release. You file IRS Form 8850 with your state workforce agency within 28 days of the start date — miss that window and the credit is gone.
The Federal Bonding Program
Federal bonding provides fidelity bond coverage at no cost to the employer, covering theft or dishonesty losses during the initial employment period. It exists specifically to remove the insurance objection some managers raise.
Build it into onboarding
Both programs fail for the same reason: paperwork missed in the first month. Put the forms in your standard new-hire packet so nobody has to remember.