In today’s fast-paced economy, every dollar matters—especially when you’re running a growing business, nonprofit, or government contracting firm. Yet many organizations miss out on tax credits that can reduce their liability, improve their bottom line, and boost strategic goals like hiring, innovation, and employee retention.
At JS Morlu, we specialize in helping businesses uncover and maximize these opportunities. Here’s a breakdown of some of the most impactful tax credits your organization should consider.
Work Opportunity Tax Credit (WOTC)
The Work Opportunity Tax Credit rewards businesses for hiring individuals from groups that face significant barriers to employment—think veterans, long-term unemployed, or recipients of government assistance like TANF or SNAP.
If you hire someone from one of these target groups and they work at least 120 hours, you may qualify for:
- 25% of first $6,000 in wages (if they work 120–399 hours)
- 40% of wages (if they work 400+ hours)
The maximum credit ranges from $1,500 to over $9,600 depending on the group. To claim it:
- Pre-screen with IRS Form 8850 before the job offer date.
- Submit to your state’s workforce agency within 28 days of the hire.
- Once certified, file IRS Form 5884 with your return.
Note: Cannabis-related businesses are excluded from claiming this credit.
Employer-Provided Childcare Credit
If your business helps employees with childcare, the IRS wants to reward you. Under IRC Section 45F, employers can receive:
- 25% of qualified childcare facility and service costs
- 10% of childcare resource and referral expenses
- Up to $150,000 in total credit annually
Qualifying costs include:
- Building or renovating on-site childcare centers
- Paying licensed third-party childcare providers
- Offering employee assistance or scholarships
Facilities must be properly licensed and can’t operate from someone’s home. This credit isn’t just a tax benefit—it can improve employee satisfaction, reduce turnover, and boost workplace morale.
Research and Development (R&D) Credit
Designed to spur innovation, this credit is a game-changer for startups and tech-driven businesses, but it’s equally useful to manufacturers, contractors, and product developers.
Qualified research must involve:
- Technological experimentation
- Development of new or improved products or processes
- Elimination of uncertainty through systematic experimentation
There are two methods to calculate this credit:
- Regular Method: Based on a fixed-base percentage and prior R&D expenses.
- Simplified Method: 14% of qualified expenses over 50% of the previous three years’ average.
Bonus for Startups: If you’re a qualified small business with less than $5 million in gross receipts, you can apply the credit against your payroll taxes (up to $250,000/year).
Disabled Access Credit
This credit under Section 44 is for small businesses making their operations accessible to individuals with disabilities. If you’ve upgraded facilities or services to comply with the Americans with Disabilities Act (ADA), you may be eligible.
You can claim 50% of expenditures up to $10,250, with a maximum annual credit of $5,000. Eligible costs include:
- Installing ramps or elevators
- Providing interpreters or accessible tech
- Offering materials in Braille or audio formats
It’s an opportunity to be inclusive while reducing tax liability.
Pension Plan Startup Credit
To encourage small businesses to offer retirement plans, the IRS offers a startup credit of up to $5,000 per year for three years to cover setup and admin costs.
If you add automatic enrollment, you can claim an additional $500/year.
To qualify:
- You must have 100 or fewer employees earning $5,000+
- You haven’t offered a retirement plan in the past three years
It’s a strategic tool to attract and retain talent while benefiting from long-term tax relief.
Business Energy Credit
Going green pays off. If your company invests in renewable energy—like installing solar panels, wind systems, or geothermal heat pumps—you may qualify for the Business Energy Investment Credit.
The credit can range from 6% to 30% of the project cost depending on the energy type and if certain wage and apprenticeship requirements are met.
These energy credits fall under Section 46 and are part of the IRS’s push to incentivize sustainable practices. It’s not just for large corporations—small businesses with commercial buildings, data centers, or manufacturing facilities can benefit significantly.
General Business Credit & Educational Assistance
The General Business Credit isn’t a single incentive, but rather an umbrella combining many credits (like WOTC, R&D, pension startup, and more) to offset your overall tax liability.
Also worth noting: educational assistance programs (IRC §127) let businesses offer employees up to $5,250/year in tax-free education assistance. While it’s not a credit, it’s a win-win—your team levels up, and you earn goodwill without increasing taxable wages.
Why It Matters for Your Business
At JS Morlu, we believe in turning compliance into opportunity. Tax credits aren’t just paperwork—they’re levers that drive growth, retention, and innovation. Whether you’re a nonprofit leader managing tight grants, a government contractor navigating DCAA rules, or a small business aiming to boost cash flow, there’s likely a credit waiting for you.
Let us help you find and unlock those hidden gems. We’ve helped dozens of businesses claim tens of thousands in credits they didn’t know existed.
👉 Need help identifying and applying for the right credits?
Schedule your free tax credit assessment or call us at 703-594-4944. We’ll help you claim what’s rightfully yours.
