Can I Get Tax Breaks for Hiring Caregivers?

What Home Health Agencies Need to Know About WOTC

Hiring qualified caregivers can be relentless. Whether you're expanding services, replacing burnt-out staff, or struggling to retain aides in a competitive market, the cost of recruitment adds up. And when you're dealing with tight Medicaid reimbursement rates, every dollar matters.

At Whirks, we’ve supported dozens of home health providers who didn’t realize a federal tax credit could help offset their caregiver recruitment costs. But the Work Opportunity Tax Credit (WOTC) was built to reward businesses like yours that provide opportunities to people often overlooked by the workforce.

In this article, you’ll learn:

• How WOTC works for home health care providers
• Which types of caregiver hires often qualify
• How to apply and claim the credit without overwhelming your admin team
• What kind of savings to expect

What Is the Work Opportunity Tax Credit (WOTC)?

WOTC is a federal tax credit for employers who hire individuals from certain “target groups” that face employment barriers. These include:

• Long-term unemployed individuals
• People on SNAP or TANF assistance
• Veterans
• Individuals from designated community zones

The credit ranges from $1,200 to $9,600 per qualified employee, depending on their category and how long they stay on payroll.

Key takeaway:
WOTC rewards you for hiring the people you’re likely already hiring, such as caregivers, aides, and support staff.

What Types of Caregiver Hires Qualify?

Many caregivers come from the same demographics WOTC targets. You may be eligible to claim the credit for:

• Home health aides receiving government assistance
• Personal care assistants (PCAs)
• CNAs or LPNs from underserved communities
• Companions or homemakers
• Veteran caregivers re-entering the workforce
• Young adults in Empowerment Zones or Rural Renewal Communities
• Administrative or intake staff hired from specified groups

Key takeaway:
Even short-term or part-time caregivers may qualify if they meet minimum hour and wage thresholds. If you’re not screening, you’re probably missing credits.

4 Reasons WOTC Is a Fit for Home Health Care

The nature of the home health care industry makes WOTC especially relevant. Here’s why:

1. You hire entry-level or part-time workers. Many caregivers work part-time, and most WOTC-eligible hires only need to hit 120 hours to qualify for a partial credit.
2. You serve lower-income or rural areas. If your staff comes from designated zones (like Empowerment Zones or Rural Renewal Counties), they may automatically qualify.
3. You’re dealing with high turnover. Frequent hiring means more opportunities to earn tax credits. Even if someone only stays a few months, you may still qualify.
4. You likely already work with veterans, people on assistance, or second-chance employees. Veterans re-entering the workforce, SNAP recipients, or those on TANF (Temporary Assistance for Needy Families) are common hires. And they’re all eligible under WOTC.

Key takeaway:
WOTC aligns perfectly with the way home health agencies hire—frequently, locally, and with purpose—making it one of the most accessible tax credits for your industry.

How WOTC Works for Home Health Agencies

You don’t need to be a tax expert to take advantage of WOTC, but you do need a process. Here’s how it works:

1. Pre-screen every new hire using IRS Form 8850, on or before the job offer date.
2. Submit the form to your state’s workforce agency within 28 days of the hire.
3. Track employee hours and wages to calculate your credit (credits increase as employees stay longer).
4. Claim the credit when you file your taxes.

Key takeaway:
Follow an established process, because if you miss the 28-day deadline, you can’t claim the credit. 

Common WOTC Mistakes in Home Health Care

Here are the pitfalls we see too often in this industry:

• Skipping WOTC forms during a rushed onboarding
• Assuming part-time or short-term hires don’t qualify
• Failing to coordinate between HR and payroll
• Thinking this is only for large companiesform
• Letting 28-day deadlines pass without filing

Many agencies unknowingly miss out on credits because no one “owns” the WOTC process internally. Using onboarding checklists and working with a payroll partner can help you prevent these mistakes.

Key takeaway:
Assign one person (or your payroll provider) to manage WOTC tracking as part of your onboarding so you don’t miss out.

What Could You Save?

WOTC credits range from $1,200 to $9,600 per qualifying employee.

The credit amount depends on the employee category and hours worked. Here's how it typically breaks down:

• 40% of qualified wages if the employee works 400+ hours in their first year
• 25% of qualified wages if the employee works 120-399 hours

Here’s what this could look like for your agency:

• You hire 10 qualifying employees in a year
• Each works at least 400 hours and earns $6,000+
• That’s $2,400 per employee, or $24,000 total

For agencies with higher turnover, say 20 to 30 hires a year, that number grows fast.

Key takeaway:
WOTC can return thousands annually to your bottom line just for hires you're already making.

How to Start Using WOTC In Your Hiring Process

You don’t need to reinvent the wheel. Just build WOTC into the process you already use:

1. Add the WOTC screening form (Form 8850) to your hiring packet or digital onboarding.
2. Assign a point person in HR or admin to submit forms on time.
3. Use your payroll system (many include WOTC tools) and work with your payroll partner to manage submissions.
4. Track employee hours and maintain documentation for tax season

Key takeaway:
Use your payroll software and work with payroll partners (like Whirks) to automate the WOTC process. Many home care agencies find it’s worth the investment.

Put WOTC to Work for Your Home Health Care Agency

WOTC can bring significant savings to your home health care business. If you’re constantly hiring and struggling to stretch every dollar, you can’t afford to overlook this credit.

Talk to your payroll provider or HR manager about embedding WOTC into your hiring process.

At Whirks, we help home health care agencies like yours build smart, compliant hiring workflows. If you’re ready to make WOTC part of your strategy, we’re here to help.

Still have questions about WOTC?

Read: “8 Questions Answered About the Work Opportunity Tax Credit.” We cover the timeframes, qualifications, and filing steps, so you can feel confident using the credit.