Why WOTC and R&D credits slip through the cracks — and how your business can capture these overlooked savings

Small and mid-sized businesses (SMBs) leave money on the table every year by missing out on valuable tax credits. Two of the most commonly overlooked credits? The Work Opportunity Tax Credit (WOTC) and the Research & Development (R&D) tax credit.

Why are these credits missed so often — even by businesses with accountants or CPAs on their side? The truth is, they’re misunderstood, and many CPAs aren’t equipped to handle the complexities involved.

WOTC and R&D: big savings, big oversights

The Work Opportunity Tax Credit (WOTC) rewards businesses for hiring individuals from certain target groups — like veterans, long-term unemployed individuals, or those receiving government assistance. Depending on the hire, this credit can be worth up to $9,600 per employee. Despite this, businesses frequently miss out because the paperwork is time-sensitive and the eligibility rules feel confusing.

The R&D tax credit isn’t just for tech companies — any business that develops or improves products, processes, or software may qualify. This credit can offset payroll taxes, potentially saving SMBs tens of thousands of dollars. Yet many assume they don’t qualify or think the effort to claim it isn’t worth the return.

Why SMBs — even with CPAs — still miss out

Even with a CPA or accountant on board, SMBs still miss these credits. Why? For one, these credits require specialized knowledge and ongoing effort to track, document, and claim properly. Many accountants focus on compliance — ensuring your taxes are filed accurately — but they may not dive into proactive tax strategy.

Here’s the reality:

• These credits are misunderstood — WOTC and R&D tax credits aren’t straightforward. Determining eligibility and staying compliant with deadlines and documentation requirements isn’t easy, even for experienced accountants. Many CPAs stick to the basics to avoid risking mistakes.
  
• Time and resource constraints — With fewer CPAs available due to a growing talent shortage, the ones who remain are overburdened. According to the American Institute of CPAs (AICPA), nearly 75% of CPAs are over 40, with many nearing retirement — and fewer young accountants entering the field. SMBs are feeling the effects through higher fees, delayed filings, and less proactive guidance.
  
• Specialized expertise is rare — WOTC and R&D credits require niche knowledge beyond traditional accounting. Many CPAs, especially those stretched thin, simply aren’t equipped to pursue these credits.
  

Tax credits vs. tax deductions: what’s the difference?

Many business owners don’t realize how much more powerful tax credits are compared to tax deductions. Here’s the key difference:

• A tax deduction lowers your taxable income. For example, a $10,000 deduction might save you $2,100 if your tax rate is 21%.
  
• A tax credit is a dollar-for-dollar reduction of your actual tax bill. A $10,000 credit reduces your taxes by $10,000 — full stop.

That’s why WOTC and R&D credits are worth chasing. They directly cut what you owe, leading to immediate, significant savings.

Don’t let credits pass you by

The bottom line? If you’re an SMB owner, you can’t afford to assume your CPA has all tax credits covered — especially WOTC and R&D. These credits are too valuable to overlook.

We help SMBs identify, qualify for, and claim WOTC and R&D credits — without overloading your CPA. Our streamlined approach handles the complexities, so you can focus on running your business while securing the tax savings you deserve.

Want to find out what you’ve been missing? Let’s uncover your savings potential — starting now.