Tax Credits For Employers Who Hire Former Prisoners

Date: February 12, 2017

State Employment Security Department offering financial incentive, bonding protection for a potential employee formerly incarcerated

As one branch of government seeks to limit an employer’s ability to know more about potential hires (Senate Bill 5312), another branch is offering incentives to take on employees whose past is there for all to see—former prisoners.

“Inconsistencies are an unfortunate staple of government,” said NFIB/Washington State Director Patrick Connor, “but what is important for our members to know about is the existence of a program from the state Employment Security Department that offers tax incentives and protections that can do a lot of social good in rebuilding a life.”

Reports the Federal Interagency Reentry Council, “People who stay out of trouble for just a few years are largely indistinguishable from the general population in terms of their odds of being arrested again in the future. Activities such as employment, education and civic engagement … reduce recidivism.”

Working with Washington state’s departments of Corrections and Veterans Affairs, the Employment Security Department has developed a WorkSource system to help incarcerated individuals prepare for and find meaningful employment after their release.

Two incentives make the program worth consideration from small-business owners:

Fidelity bonds: Employment Security provides bond coverage for employees who have barriers that could lead employers to question their reliability or honesty and deny them a job—including people with:

  • a criminal background
  • dishonorably discharged veterans
  • recovering substance abusers (alcohol & drugs)
  • individuals with a poor credit history.

Fidelity bonds provide 100 percent coverage for employee theft, forgery, larceny or embezzlement. There are no deductibles. The bonds last six months and are issued in increments of $5,000 up to a total of $25,000.

According to the Council of State Governments Justice Center, this tool has proven to be extremely successful with only 1 percent of the bonds ever issued resulting in a claim. Call 800-339-3981 to learn how you can access fidelity bonds.

Tax credits: The Work Opportunity Tax Credit (WOTC) is available to employers who hire certain hard-to-place workers, including felons hired within a year after their conviction date, work release date or release date. Employers may apply for a credit of up to $2,400 toward their federal business taxes for every ex-felon hired. You can request WOTC certification online here or call 360-902-9326 for more information.

The WorkSource program, says Employment Security Commissioner Dale Peinecke, “creates a win for employers and job seekers. It protects employers and makes it easier for ‘risky’ job seekers to find jobs and contribute to society.”

 

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