State Hiring Tax Credits: How to Claim Thousands in Overlooked Incentives

When it comes to saving money on hiring, federal tax credits like the Work Opportunity Tax Credit (WOTC) often get the spotlight—but did you know many states offer their own hiring and employment tax incentives as well?

If you're only focusing on federal WOTC, you could be missing out on thousands in additional credits and rebates available at the state level.

In this post, we'll break down:

• What hiring tax credits are

• Why state-specific tax incentives matter

• How much you could be earning

• How Canary helps you claim every available dollar

What Are Hiring Tax Credits?

Hiring tax credits are government incentives designed to encourage employers to hire individuals from certain demographics, industries, or geographic regions. These credits can reduce your federal or state income tax liability—often by hundreds or thousands per eligible employee.

While WOTC is the most well-known federal hiring credit, many states have their own programs that stack on top of WOTC or apply in different ways.

Why State-Level Hiring Incentives Matter

Each state has its own goals—whether it's boosting employment in distressed areas, encouraging veteran hiring, or supporting second-chance employment—and many provide significant tax relief to businesses that align with those goals.

By combining federal and state credits, businesses can dramatically increase their savings. For example:

• A business in California may qualify for the California Competes Tax Credit on top of WOTC.

• Employers in New York may benefit from the Hire-A-Vet Credit or Urban Youth Jobs Program.

• Companies in Louisiana might qualify for the Enterprise Zone Program when hiring from designated zones.

• Georgia, Texas, Florida, and others offer credits for hiring in specific industries (e.g., manufacturing, hospitality, logistics).

Common State Hiring Tax Credit Categories

State-level credits often fall into the following buckets:

• Geographic-based hiring (e.g., Enterprise Zones, Opportunity Zones)

• Veteran hiring incentives

• Second-chance hiring for individuals with criminal records

• Youth and student worker programs

• Disability and vocational rehabilitation incentives

• Industry-specific credits (e.g., for healthcare, agriculture, or tech)

These credits can range from a few hundred to several thousand dollars per eligible hire, and many states allow these to be claimed annually for each qualifying employee.

How Canary Helps You Claim Every Credit

Tracking down and qualifying for these incentives can be overwhelming—but that’s exactly where Canary comes in.

Canary’s hiring tax credit platform automatically:

• Screens candidates for both federal and state tax credit eligibility

• Handles all required forms and submissions

• Notifies you when a new hire qualifies

• Tracks and reports your credits earned—down to the state and local level

And best of all: there’s no upfront cost or risk. We only succeed when you save.

Don't Leave State Money on the Table

If you’re hiring in the U.S., there’s a good chance you’re eligible for multiple overlapping tax incentives—but only if you know where to look.

Whether you’re a grocer in Florida, a manufacturer in Michigan, or a healthcare provider in Texas, Canary helps you capture every federal, state, and local hiring incentive available to your business.

👉 Ready to start claiming what you’re owed?
Book a demo or join our free webinar to learn how to unlock thousands in tax credits per hire—automatically.