Author: South Carolina Department of Employment and Workforce
This article originally appeared in the Spring 2026 issue of the South Carolina CPA Report
Hiring the right employees at the right time and setting them up for success helps maximize each dollar spent on labor costs. Adding a few simple steps to your hiring process can stretch your budget and give life-changing opportunities to skilled, ready-to-work South Carolinians.
South Carolina employers can reduce their general tax liability by $1,200–$9,600 for each new jobseeker they hire who faces defined barriers to employment, such as unemployed veterans, returning citizens, jobseekers with disabilities, individuals participating in social services assistance programs, and more. Employers can also receive free fidelity bonds for eligible new hires who meet the criteria, or current employees at risk for layoff or being considered for promotion.
These two incentive programs are supported by the U.S. Department of Labor and administered by the South Carolina Department of Employment and Workforce (DEW).
Work Opportunity Tax Credit (WOTC)
The first incentive is the Work Opportunity Tax Credit (WOTC) program, which provides tax credits to employers when they hire a new eligible employee. Non-profits can reduce their Social Security liability through this program since they have no general tax liability. After the employer makes the hiring decision, they complete minimal paperwork to apply. There is no limit on the number of qualified hires the organization can claim, though the rehire of former employees does not qualify. A complete WOTC submission includes IRS Form 8850 and ETA Form 9061. Employers benefit from recruiting jobseekers within the following defined populations while renewing their ability to earn a steady income:
- Temporary Assistance for Needy Families (TANF) recipients
- Supplemental Nutrition Assistance Program (SNAP) recipients
- Empowerment Zone residents
- Marlboro County Rural Renewal Community residents
- Vocational Rehabilitation or Ticket-to-Work participants
- Recently released ex-felons
- Supplemental Security Income (SSI) recipients
- Disabled veterans who, within the last year, were discharged or unemployed for more than six months
- Unemployed veterans
- Veterans receiving SNAP
- Long-term unemployment recipient
Employers can routinely screen applicants or newly hired individuals to determine if they identify with any of the WOTC target groups by completion of the IRS Form 8850 (Pre-Screening Notice and Certification Request). If so, the employer submits the IRS Form 8850 and the ETA Form 9061 (DOL Individual Characteristics) within 28 days of the start date to DEW via the S.C. WOTC online portal, or by mail, for possible final certification. If the submission is certified by DEW, the business may calculate the tax credit using the Tax Credit Calculation Chart on the DEW website, which outlines the minimum retention requirements and wage caps. If the new hire does not indicate eligibility, the organization does not need to submit the forms.
Some jobseekers with defined barriers to employment may present an ETA Form 9062 (Conditional Certification) to an employer, along with a business partner letter explaining the process, during the application process. For example, a citizen released from the South Carolina Department of Corrections (SCDC) may have received a conditional certification from SCDC, or a disabled veteran may have received a conditional certification from the Disabled Veterans’ Outreach Program (DVOP). If this applicant is hired, the employer may submit the IRS Form 8850 with the DOL Form 9062 to DEW for possible final certification.
A for-profit entity will also need to file for the WOTC with the Internal Revenue Service (IRS) using IRS Forms 3800 and 5884. Non-profit 501(c) entities will file for the WOTC using IRS Form 5884-C. These forms can be found on the IRS website.
Employers may choose a third party to manage their WOTC process. DEW’s WOTC staff will provide a list of WOTC consulting firms upon request. Consultants must contact the WOTC office to establish a new WOTC online portal account.
For tax credit amounts, please visit bit.ly/dew-wotc.
To create a WOTC online account, visit bit.ly/4sVK6Yc or for assistance, email staff at WOTC@dew.sc.gov.
Federal Bonding Program
The second incentive is available through the Federal Bonding Program, which provides employers with a free $5,000 fidelity bond for new hires, or employees who need bonding to prevent being laid off, or to secure a promotion. Employers can rely on this coverage to pay in the event of acts of dishonesty that result in a monetary loss. Bond coverage may be provided for any worker who may be considered high risk, such as someone who has:
- No work history
- A low credit score
- Filed for bankruptcy
- Been dishonorably discharged
- Has a record of arrest, conviction, imprisonment, parole, probation, or any police record
Larger bond amounts may be provided, and the bond effective date is the job start date. The bonds terminate after six months, but an additional six months of coverage may be requested from the DEW Federal Bonding Department. Employers must enroll online at Jobs.SCWorks.org to participate.
Employers interested in bonding an applicant as a condition of their employment, can email FederalBonding@dew.sc.gov on the newly hired employee’s first day. For more information, please visit: dew.sc.gov/federal-bonding-program.
Hire with Confidence
Why should employers participate in these programs and hire individuals considered “at risk?” Jobseekers who are in vulnerable situations or have made past mistakes are eager to show employers that they are hard-working, trustworthy, and talented employees. Not only does a business gain a valuable worker, but this investment in a person can entirely change their life for the better while improving the company’s workforce, productivity, and bottom line. Participating in WOTC or Federal Bonding helps build mutually beneficial relationships between employers and employees and gives peace of mind to a business owner knowing they are making the right decision with the right intentions. Reach out to DEW to learn how you can participate and take advantage of the professional, financial, and interpersonal benefits of these programs.
