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Complete Tax Credit Services for Buisness Growth

Tax credits allow businesses to reduce their tax liability dollar-for-dollar. In essence, a tax credit subtracts directly from the taxes you owe, making it far more valuable than a deduction of the same amount. Governments create these credits to encourage specific actions—like hiring, investing in clean energy, or supporting families—and smart businesses can leverage them to save money and invest in growth. However, each credit has its own rules and eligibility, which can be complex. 

Hemlock Financial’s tax credit services help businesses maximize savings through expert guidance on Employee Retention Credits (ERC), Work Opportunity Tax Credits (WOTC), energy efficient home improvement credits, and specialized programs like New Markets Tax Credits (NMTC). Our comprehensive tax credit services ensure you claim every available credit while maintaining full compliance.

Explore Key Tax Credits for Your Business

Employee Retention Credit (ERC)

A refundable payroll tax credit created under the CARES Act to help businesses keep employees during the COVID-19 pandemic.

The ERC rewarded companies for retaining staff during government shutdowns or downturns. It provided a credit (initially 50%, later up to 70%) of qualifying wages paid to employees. The credit was fully refundable, meaning if the credit exceeded your payroll tax, you’d receive a check for the difference. 

For example, eligible employers could claim up to 50% of $10,000 in wages per employee for 2020, and 70% of $10,000 per quarter per employee in 2021. ERC was available to businesses (including nonprofits) whose operations were fully or partially suspended by COVID-19 restrictions or that experienced a significant drop in revenue (generally a 20–50% decline vs. 2019).

Work Opportunity Tax Credit (WOTC)

A federal hiring credit that promotes workplace diversity by incentivizing employers to hire from certain disadvantaged groups.

The WOTC encourages hiring individuals who have historically faced barriers to employment, such as veterans with service disabilities, long-term unemployed recipients of public assistance, ex-felons, SNAP or SSI beneficiaries, youth in empowerment zones, and more. Employers must obtain certification that a new hire belongs to an eligible group. Qualified employers can claim a credit based on the new hire’s first-year wages. 

Typically, this is 40% of up to $6,000 in wages (a $2,400 credit), but higher credits apply for some veterans (up to $5,000 for certain vets, or up to $9,600 for disabled vets). In practice, businesses often earn between $1,200 and $9,600 per eligible hire. Businesses (for-profit and nonprofit) that hire and certify new employees from the IRS-defined target groups can claim WOTC. Target groups include veterans, ex-felons, long-term TANF recipients, SNAP (food stamp) recipients, individuals on SSI, vocational rehab graduates, summer youth workers, and more

Energy Efficiency and Clean Energy Credits

Federal incentives for businesses investing in sustainable, energy-saving equipment and projects.

These credits reward investment in renewable energy such as solar panels, wind turbines, battery storage, and energy-efficient upgrades like high-efficiency HVAC, LED lighting, insulation, and smart energy systems. For commercial properties, an expanded deduction (IRC Sec. 179D) lets owners write off qualifying upgrades. Many clean energy installations qualify for an Investment Tax Credit equal to 26–30% of project costs, for example, solar or geothermal systems. The Section 179D deduction can be worth $0.50–$1.00 per square foot of energy savings, or more if prevailing wage rules are met. 

In total, these incentives dramatically lower the net cost of green upgrades. Generally, the property must be in the U.S., and the improvements must meet federal efficiency standards. Commercial building owners who install certified energy-efficient lighting, HVAC, building envelope systems, or renewable generation in a plan that cuts energy use by at least 25% may claim the credit or deduction. (Check IRS guidelines or work with Hemlock to identify your projects’ qualification.)

New Markets Tax Credit (NMTC)

A credit designed to spur investment in low-income or underserved communities.

The NMTC incentivizes banks and investors to fund businesses, real estate, or community projects in designated “qualified low-income” census tracts. The Treasury allocates credit authority to Community Development Entities (CDEs), which in turn finance eligible projects. Investors in these CDEs earn a federal tax credit over seven years. Investors receive a 39% tax credit of the invested amount (5% each year for the first three years and 6% each year for the next four years). For the project, this is roughly an 18–25% subsidy of the development cost. 

Over its lifetime, the program has funneled billions into businesses that might not otherwise get financing, creating jobs and revitalizing communities. To use NMTCs, the project (called a Qualified Active Low-Income Community Business) must be located in a designated low-income or severely distressed census tract. Projects can include manufacturing, healthcare, education, commercial, and other real-estate or operating businesses. Credit allocations to CDEs are competitive, so Hemlock can help you prepare a strong application and partner with NMTC funds.

Employer-Provided Child Care Credit

A tax credit for businesses that support employee childcare.

Under IRC Sec. 45F, companies that build, expand, or maintain qualified childcare facilities (or subsidize child care) for employees can claim a tax credit. This encourages employers to help working parents with childcare needs. The credit covers 25–50% of childcare expenses. Previously, the maximum credit was $150,000 (25% of up to $600,000 in expenses). 

Recent law permanently raised this: now larger employers can claim 40% (up from 25%) of up to $1.25 million in costs (max $500,000 credit), and small businesses can claim up to 50% of $1.2 million (max $600,000). Any business (for-profit or nonprofit) that establishes on-site childcare, contracts with a provider, or operates a dependent care assistance plan can qualify. The key is that the program is primarily for childcare, not dependent adult care, and requires proper documentation of expenses.

Why Work with Hemlock Financial for Tax Credits?

Claims and compliance for tax credits can be tricky, and rules change frequently. Hemlock’s tax professionals specialize in these incentives, so you don’t have to navigate the complexity alone. We proactively monitor every credit program and apply it to your business goals. For example, leading tax advisers emphasize ensuring “timely preparation and filing of all required applications and compliance reports” as essential to securing full benefits. 

We handle all the paperwork and documentation for you—from determining eligibility, to collecting certifications (e.g., WOTC forms), to preparing tax filings—so you can confidently claim the credits you deserve. In short, working with Hemlock helps you save time, stay compliant, and maximize your tax savings without the stress.

Frequently Asked Questions about Tax Credits

What was the Employee Retention Credit (ERC)

The ERC was a refundable payroll tax credit introduced in 2020 to help businesses keep employees during COVID-19. Eligible employers (including nonprofits) could claim up to 50% of qualified wages (up to $10K per employee) for 2020, and up to 70% of $10K wages per quarter in 2021. It applied to businesses fully/partially shut by lockdowns or with sharp revenue drops. Any credit beyond payroll taxes was refunded to the business. (Note: The ERC program has since ended and cannot be claimed for new wages after 2021, but our team can still advise on late filings and audits.)

How does the Work Opportunity Tax Credit (WOTC) work?

WOTC gives employers a tax credit for hiring people from certain targeted groups. To use it, you must screen new hires and get state certification that the worker qualifies (for example, a veteran, SNAP/TANF recipient, ex-felon, SSI beneficiary, etc.). Once certified, you can claim a credit equal to a percentage of that employee’s wages. Most groups qualify for 25%–40% of up to $6,000 wages (so typically up to $1,200–$2,400 per employee), while disabled veterans can yield much higher credits (up to $5,000–$9,600). There is no cap on how many hires you can claim in a year, but you must certify each one within 28 days of hiring.

Federal law rewards many commercial clean energy and efficiency projects. Generally, you can claim a percentage of costs for installing qualifying renewable energy systems (like solar panels, wind turbines, fuel cells, or battery storage) and energy-efficiency upgrades (like efficient HVAC, lighting, or building envelope retrofits). For example, many solar or geothermal installations are eligible for a 26%–30% Investment Tax Credit on equipment costs. Additionally, owners of commercial buildings can take a 179D deduction (up to $0.50–$1.00 per sq. ft., indexed) by upgrading to top-tier energy-efficient lighting, heating/cooling, or envelope systems. We can help identify which projects and equipment meet IRS criteria and maximize the available credits.

How does the New Markets Tax Credit (NMTC) benefit a business?

The NMTC isn’t claimed directly by your company’s tax return; instead, investors in your project earn tax credits. If your business or project is in a qualified low-income community, a Community Development Entity (CDE) can invest capital in your venture. Those investors then claim a 39% tax credit against federal income tax over seven years. This effectively subsidizes your financing (typically an 18–25% project benefit), allowing you to access capital at lower cost. Projects must be in designated low-income or “severely distressed” census tracts (e.g., poverty rate >20% or median income ≤80% of area median). Hemlock can help structure your deal and connect you with NMTC funds.

What is the Employer-Provided Child Care Credit (Section 45F)?

Section 45F gives businesses a credit for providing child care for employees. You can count expenses for on-site child care facilities, daycare subsidies, or contributions to childcare FSA/assistance plans. The credit covers 25%–50% of qualified expenses. Under the new law, larger employers get a 40% credit (up from 25%) on expenses up to $1.25 million (max $500K credit), while small employers can get 50% on up to $1.2 million (max $600K credit). For example, if you spend $500,000 on childcare improvements, a large business now gets a $200,000 tax credit. This encourages companies to support working parents and reduce employee turnover. Hemlock can calculate your eligible expenses and ensure you meet all documentation requirements.

Book Your Complimentary Tax Credit Review

Let us help you explore available tax credits and see how much you could save. Schedule your free consultation with Hemlock Financial today to discover tax-saving strategies tailored to your business.

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