If you’re earning 7 figures and not claiming R&D or Work Opportunity Tax Credits (WOTC), you may be leaving serious money on the table — especially under the new changes in the Big Beautiful Bill (BBB).
At Washington & Co. Inc — Strategic Tax & Advisory, we help business owners capture every available tax credit they qualify for. With the BBB now in effect, the rules have shifted, and the opportunity has expanded — but only for those who understand the new compliance requirements.
This post breaks down:
- What changed under the Big Beautiful Bill
- Who now qualifies for R&D and WOTC credits
- How to document, claim, and maximize them
What the Big Beautiful Bill Changed for Tax Credits
Passed in 2025, the Big Beautiful Bill introduced several key changes to credit eligibility, calculation, and documentation:
- Expanded R&D credit eligibility for startups, software companies, and firms conducting internal innovation
- Revised WOTC qualification categories — with added focus on previously overlooked employee demographics
- Stricter documentation and substantiation rules for both credits
- Filing window tightening — especially for amended claims and retroactive credits
In short: there’s more money on the table, but fewer chances to grab it casually. Strategy and compliance matter more than ever.
R&D Credit: Still Misunderstood — But More Valuable Than Ever
Most business owners hear “R&D credit” and assume it doesn’t apply to them. But under IRS rules, you don’t need a lab coat to qualify.
You may qualify if your business:
- Develops or improves software (including internal tools)
- Builds or tests prototypes (even physical products)
- Enhances manufacturing processes
- Designs new systems, workflows, or technologies
The key is whether the work involves:
- Technological uncertainty
- A process of experimentation
- A permitted purpose (new or improved function, performance, reliability, or quality)
Under the BBB, the credit percentage increased for certain eligible businesses, and you can now apply the credit against payroll tax liability in more cases.
Average savings: $15K–$40K/year for small firms, and into six figures for software-heavy teams.
WOTC: Still Underrated, Now Easier to Qualify For
The Work Opportunity Tax Credit (WOTC) rewards employers who hire people from certain targeted groups. It’s not just about altruism — it’s about real savings.
The BBB expanded and clarified qualifying categories, including:
- Long-term unemployed individuals
- Veterans
- Individuals receiving government assistance (TANF, SNAP)
- Formerly incarcerated individuals
- Certain youth and summer employees in designated areas
Credit amounts range from $2,400 to $9,600 per eligible employee — and in some cases, higher if hiring thresholds are met.
But here’s the catch: You must file IRS Form 8850 within 28 days of hire — no retroactive claims allowed.
How to Layer Credits Into a Full-Year Strategy
These credits aren’t just “nice to have” — they should be integrated into your quarterly tax and hiring strategy.
Here’s how we help clients do that:
- Pre-screen hires for WOTC using automated tools during onboarding
- Catalog R&D-eligible projects early in the fiscal year
- Build time-tracking systems that tie labor costs to qualifying activity
- Track expenses properly: contractor vs. W-2 labor, domestic vs. offshore work
- Bundle R&D credit strategy with other incentives like 179, energy credits, and bonus depreciation
When mapped together, these credits can reduce a client’s effective tax rate — and free up capital for reinvestment, hiring, or debt paydown.
Real Example: $82,400 in Credits Across 2 Strategies
One of our clients — a logistics SaaS company with $1.7M in annual revenue — came to us unaware they qualified for either credit.
Here’s what we implemented:
- WOTC screening during onboarding uncovered 3 qualifying hires
- R&D time-tracking implemented for 3 developers
- Documentation stack built to support Form 6765 and Form 5884 filings
Total credit claimed in Year 1:
- R&D: $61,800
- WOTC: $20,600
That $82,400 now funds part of their annual Roth 401(k) and marketing budget — with ongoing systems in place for next year.
Action Checklist
- Review your 2025 hires: Did any qualify under WOTC?
- Review projects: Are you developing or improving tech, tools, or systems?
- Set up a system for tracking time, expenses, and eligibility
- File Form 8850 within 28 days for all new qualifying hires
- File Form 6765 for R&D credit before return deadline
- Book a credits + incentives audit before December
Book a Credits + Incentives Review Call
R&D and WOTC credits are some of the most overlooked tax savings for growing businesses. We’ll help you identify what you already qualify for — and what changes under the new tax law.
Book a Credits + Incentives Review Call with Washington & Co. Inc — Strategic Tax & Advisory.