The Work Opportunity Tax Credit (WOTC) is awarded to employers for hiring from ten target groups. Some of the most commonly certified (WOTC) groups are recipients of federal public aid, such as food stamps, family assistance (TANF) or social security. Chances are you’ve hired someone in this category without ever knowing it.
Over 19 million households received SNAP (food stamps) nationwide in 2018, USDA reports say. More than a million families qualified for family assistance funding, according to the Department of Health and Human Services.
When you hire from these segments, you could earn up to $2400 per eligible new hire. New hires must work at least 120 hours in their first year of employment. Qualifications include the following:
SNAP (food stamps) Beneficiaries
At least 18 years AND
Member of family that received SNAP within six months before hire OR for three to five of the previous six months
SSI Recipients
Received SSI benefits within 60 days of date of hire
Long Term Family Assistance (TANF) Recipients
Received assistance under a IV-A program for at least 18 consecutive months before hire date, OR
Received assistance for 18 months after 8/5/1997 and it’s been under 2 years since the end of the earliest of the 18-month period, OR
No longer eligible for aid due to Federal or State laws limiting maximum time that payments are allowed and it’s been under two years since cessation
Do you know a military veteran in search of a job? When you recruit from this group, you bring jobs to the the men and women who have protected our country.
Not only can your hiring practices benefit military veterans in need of work. You could also qualify for the federal Work Opportunity Tax Credit (WOTC). This incentive awards up to $2400-9600 per eligible applicant to businesses nationwide. Military veterans fit WOTC requirements as long as they meet these subcategories.
1.) Long Term Unemployed Veterans- These applicants are considered as long as one of two criteria are met:
They were without work at least four weeks during the twelve months before their hire date.
They received unemployment compensation for 27 weeks or longer in the year before their hire date.
2.) SNAP beneficiaries or recipients- Veterans are eligible if they or family members receive SNAP aid. This target group must have received assistance at least three months during the fifteen month period ending on their hire date.
3.) Disabled veterans- WOTC representatives consider this target group if either of the following apply:
Hired within a year of discharge or release from active duty.
Unemployed at least six months in the year prior to hire.
Applying for WOTC is a simple process. New hires complete IRS Form 8850 and 9061. These applications must be submitted to state workforce agencies within 28 days of new hires’ start dates. Applicants need to work a minimum of 120 hours during the year once they are hired. The credit is calculated, based upon the hours and wages paid during the new hire’s first year of work.
If you would like to learn more, call us at 563-663-1656. Try our savings calculator to see how much your business could be awarded with the WOTC incentive.
Do you operate in an area affected by last year’s hurricanes? Do you hire persons in impacted areas? If so, your business may have extra time to submit Work Opportunity Tax Credit (WOTC) applications.
Under typical circumstances, WOTC program participants have 28 days from new hires’ start dates to apply for the Work Opportunity Tax Credit. For those most impacted by Hurricanes Michael and Florence, the Federal Disaster Relief extends the deadline. Now through February 27, 2019, extension guidelines allow eligible businesses to submit new hires made between September 10, 2018 and January 31, 2019.
Qualified businesses must either operate in a disaster zone or hire persons from corresponding areas. The temporary extension applies to the following areas:
Hurricane Michael:
Alabama counties: Geneva, Henry, Houston, and Mobile.
Florida counties: Bay, Calhoun, Franklin, Gadsden, Gulf, Hamilton, Holmes, Jackson, Jefferson, Leon, Liberty, Madison, Okaloosa, Suwannee, Taylor, Wakulla, Walton, and Washington.
Virginia counties: Botetourt, Charles City, Chesterfield, Craig, Floyd, Franklin, Grayson, Halifax, Henry, Isle of Wight, King and Queen, King William, Lancaster, Lunenburg, Mathews, Mecklenburg, Nelson, Northumberland, Nottoway, Patrick, Pittsylvania, Pulaski, Russell and Roanoke Counties and the Independent Cities of Bristol, Danville, Franklin, Hampton, Martinsville, Newport News, Richmond, and Williamsburg.
WOTC is a federal tax credit awarded to businesses who hire from populations that have historically faced barriers to employment. Companies can earn as much as $2,400 in tax credit for each eligible new hire.
For more information, contact us at 563-583-2115 or try our savings calculator to see how much tax credit you can earn.
In the last three months, US residents were devastated and are now faced with recovering from the impact of Hurricanes Harvey, Irma, and Maria, with Harvey being one of the most powerful in recent history.
As we all know after such devastation, it is vital to a community to get back to operational as soon as possible and this includes helping businesses get their employees back to work and providing much needed services. Disaster relief in the aftermath of crippling weather events is as important to businesses as it is to the residents of affected communities.
On September 29, 2017, President Trump signed HR 3823, the Disaster Tax Relief and Airport and Airways Funding Act of 2017, and that bill became law on that same date. Section 503 of the bill, entitled “Disaster-Related Employment Relief,” addresses the retention tax credit, which applies to wages paid by an eligible employer to an eligible employee during the time when the employee’s workplace was inoperable as a result of a declared disaster. The retention credit applies to impacted disaster zones resulting from Hurricanes Harvey, Irma, and Maria and also has specific requirements to meet eligibility.
Now to the good stuff! How does a business qualify? Which employees are eligible? Etc, etc…the fun facts are below…
To paraphrase the cryptic language of the Internal Revenue Code, the employee retention credit for any taxable year is an amount equal to 40 % of the qualified wages for each eligible employee, of the affected employer, for that taxable year, not to exceed $6000 in qualified wages for each eligible employee.
To clarify…an “eligible employer” means any employer,
1) which conducted an active trade or business on August 23, 2017, in the Hurricane Harvey disaster zone, on September 4, 2017, in the Hurricane Irma disaster zone, and on September 16, 2017, in the Hurricane Maria disaster zone and
2) if the business was inoperable on any date between August 23, 2017, and before January 1, 2018, as a result of damage sustained by Hurricane Harvey; dates between September 4, 2017, and before January 1, 2018, as a result of damage sustained by Hurricane Irma; and dates between September 16, 2017, and January 1, 2018, as a result of damage sustained by Hurricane Maria.
The retention credit also requires that the employee is deemed an “eligible employee”…which is defined as an employee whose principal place of employment on August 23, 2017, September 4, 2017, and September 16, 2017, coincides with the designated hurricane disaster zones for Hurricanes Harvey, Irma, and Maria.
In addition, the term “qualified wages” means wages paid or incurred by an eligible employer, with respect to any eligible employee, on any of the specified dates for each of the hurricane disaster zones beginning on the date the business first became inoperable immediately before the hurricane and ending the date that the business was able to resume operations at the designated workplace. The qualified wages include wages paid whether the employee performs no services, performs services at a different location, or performs services at the principal workplace before operations have resumed.
Here’s the caveat, and there is always a caveat with new legislation. To be considered for the credit, the employee cannot be treated as an “eligible employee” if the employer is allowed the credit under the Internal Revenue Code of 1986 for the same time period.
If you would like more information and you just LOVE reading new tax legislation you can read the bill in it’s entirety here.
We know know tax credit changes can be difficult to understand. If you would like to know more about how to claim this credit, or whether or not you qualify, feel free to give us a call at 866-844-9529, or reach out to us here.
Recently, we wrote an article, outlining the nine Work Opportunity Tax Credit (WOTC) target groups. Here we’ll be focusing on one of the higher volume target groups, SNAP or what was formerly known as food stamp beneficiaries. SNAP participants can qualify your company for as much as $2400 per eligible hire.
The requirements to qualify are twofold:
Candidates must be 18 to 39 years of age and a member of a family receiving SNAP benefits.
They received benefits either a) six months prior to their hire date, or b) at least three of the five months preceding their start date.
SNAP, stands for Supplemental Nutritional Assistance Program. Last year, it was awarded to over 44 million Americans nationwide. Among this widely diverse group are workers with secondary jobs, single parents, military families and persons with disabilities. SNAP has aided people of all walks of life at one time or another, including notable celebrities like Bruce Springsteen and Flipboard CEO Mike McCue.
As one of the most commonly-qualified WOTC segments, in 2016, 1.8 million SNAP recipients qualified for WOTC credit. That means employers, nationwide, potentially earned up to $4.3 billion last year from this target group alone. With so many Americans receiving SNAP benefits, you’d be surprised just how many eligible employees you hire. To learn more, check out our tax credit calculator to see what you could earn or give us a call at 563-583-2115.
Recently we’ve heard from a quite a few people that said they don’t participate in the Work Opportunity Tax Credit Program (WOTC) because they “don’t hire people that would qualify.” More often than not, after a brief discussion, we were able to discover that they did hire qualified employees. We’re not sure where the misunderstandings are coming from, but we thought this to be great time to revisit the list of WOTC target groups so more companies can be better informed when exploring the program.
There are 9 Target Groups of employees that U.S. employers can hire to earn WOTC tax credits. Below we’ve provided a brief overview of each target group without going into all specifics.
1.) Military Veterans
Military veterans must meet one of two criteria in order to qualify for any credits. They must have served at least six months of active duty or been discharged from active duty because of an service-related injury. Secondly, active duty lasting three months or longer must be completed at least sixty days before they’re hired.
2.) Long Term Unemployed
Employees that have been unemployed for a combined 6 months of the previous 12 months prior to their hire date.
3.) SNAP (Food Stamps) Recipients
Eligible SNAP applicants are identified as those who are between 18 and 39 and live in a household that is receiving food stamp aid.
4.) TANF Recipients (Temporary Assistance for Needy Families)
Hired employees meet the criteria if they have been on TANF benefits for at least 18 months consecutively or cumulatively prior to their hire date.
5.) SSI
New hires who received Social Security Income as part of Title XVI define this target group.
6.) Vocational rehabilitation referrals
Individuals qualify if they have physical or mental disabilities and complete a certified vocational rehabilitation program.
7.) Empowerment Zones
Candidates under 40 meet this criteria as long as they reside in federally- designated Rural Renewal or Empowerment Communities.
8.) Summer Youth
16-17 year-old new hires, residing in Empowerment Zones are categorized through the summer youth target group. New hires must take place from mid-May through September
9.) Ex-felons
WOTC-qualified ex-felons include those with release dates within 12 months of their hire date.
Many companies have dismissed participating in the WOTC program because the believed that no one they hired would qualify. Sadly this has been a costly mistake for a lot of companies. With the maximum credit per employee being $2,500, $4,500, or $9,600 you can see it doesn’t take that many qualifying employees to add up to significant tax savings. We typically see that 20-25% of new hires qualify for the program.
If you’d like to explore the WOTC program further and what your potential tax savings could be, click here to contact us, or here to use our free estimating calculator.
A few months back we shared with you here, that the Federal Government announced their renewal of the Work Opportunity Tax Credit Program. (WOTC) for 2015 through 2019 and that is really great news!
The renewal also included a temporary Transitional Relief period that allows you to go back and submit all employees you hired between January 1, 2015 and June 29, 2016 for tax credits that had been missed. This was a tremendous opportunity since there were millions of new hires that were not submitted for credit during that time period.
Recently the IRS announced a final extension to the Transitional Relief program and now you have until September 30, 2016 to make sure all your new hires are submitted for tax credits!
Nothing has changed with the program except you have an additional 90 days to submit your employees hired between 1/1/2015 and 9/30/2016 that worked 120 hours.
Although this might seem like a daunting task, we have systems prepared that help us handle the heavy lifting for you.
If you’re wondering if the reward is worth the effort; the companies we help see an average increase of $65,000 in tax credits. (Some as high as $300,000)
There’s only one catch! We Must get all of your 2015 new hires submitted ASAP!
Procrastinating will lead to missed credits or having your credits delayed by several months because of your State’s potential backlog. To find out just how easily we can help you take full advantage of this opportunity, reach out to us here. We will show you how we can handle all the legwork for you, but we need to get started soon because time is running out.
Don’t miss this opportunity and over-pay your 2015/2016 taxes!
Companies often miss hiring amazing employees because of unfounded fears associated with hiring persons with disabilities. Many major corporations have found tremendous success and benefits by hiring from a talent pool that most shy away from. Here we’d like to help ease your fears by proving that most of them are truly myths.
Hiring persons with disabilities is a rewarding experience Businesses shy away from opportunities, fearing commonly held misconceptions. Some of these fears are unfounded and you may be surprised to know that hiring from this population really isn’t as risky as commonly believed.
Fear: lackluster performance compared to other workers.
Fact: Researchers have actually found similar work standards performed among employees, regardless of their abilities. As a matter of fact, companies, such as Walgreen’s, have actually seen better safety records and the same, if not better, production results from persons with disabilities compared to non disabled employees. Other businesses, such as car wash owners, have reported that they actively recruited persons with autism thanks to their meticulous attention to detail and precision when cleaning vehicles. Restaurant franchises, such as Applebee’s and Five Guys Burgers and Fries, have successfully employed persons with disabilities to greet customers, or to oversee the small, yet invaluable details, like cleaning the dining rooms, maintaining supply stocks, and rolling silverware.
Convenience store managers report that workers with disabilities have actually improved productivity among teams. Their work attitudes have boosted morale and their loyalty to cleaning, stocking shelves and maintaining a neat store appearance helps co-workers focus on other duties essential to the workplace.
Fear: Poor attendance and increased turnover
Fact: Walgreen’s experience proves this belief couldn’t be farther from the truth. A study of its distribution centers by the American Society of Safety Engineers found that workers with disabilities had a 48% lower turnover rate than their non-disabled coworkers, 67% lower medical costs and 73% lower costs due to absenteeism. Many employees with disabilities, similarly, look forward to coming to work and exceeding expectations. In turn, business managers have noted higher retention rates among persons with disabilities as well. Managers have reported improved employee morale among staff contributing to overall employee engagement and increased job satisfaction.
Fear: Increased exposure to litigation and liability.
Fact: Although some industries include elevated risks, such as food service, companies like Starbucks, have mitigated workplace hazards by working with local agencies to build low risk tasks tailored to employees’ talents. Statistics show that legal action concerning employers and disabled employees is quite sparse. From 2011-2015, only 200 lawsuits were filed by the EEOC involving persons with disabilities. That averages fifty lawsuits a year, nationwide, or one lawsuit per state annually.
Fear: High supervision demand and increase coworkers’ responsibilities.
Fact: Many local work rehabilitation services offer job coaches for persons in need at no cost to the individual’s employer. The agency support staff train persons in need, thus freeing co-workers to tend to their own responsibilities maintaining a high level of productivity.
Not only are these fears untrue, but employers that have hired persons with disabilities have experienced improved morale and productivity. There are plenty of other benefits to be had, not the least of which is qualifying the employer for lucrative tax credits. The Federal government pays millions of dollars in tax credits each year for businesses who hire specific employees under the Work Opportunity Tax Credit (WOTC) Program.
Tax Credit Group Group administers the Work Opportunity Tax Credit (WOTC), a federal program rewarding businesses who hire persons with disabilities. To learn how to save tax liability for your business, contact us Here or call 563-583-2115.
The Federal Government recently announced their renewal of the Work Opportunity Tax Credit Program. (WOTC) for 2015 through 2019 and that is really great news!
The WOTC program experienced some challenges in 2015 stemming from the late December renewal. Although the renewal was retroactive, it created a hardship for employers seeking to take advantage of these lucrative tax credits.
Due to the challenges last year, many people chose not to participate and apply for 2015 tax credits.
The most exciting news is that the IRS recently issued notice 2016-40. This notice makes 2 very important allowances you need to know about.
You now have an opportunity to go back and get your Work Opportunity Tax Credits (WOTC) by submitting ALL employees you hired between January 1, 2015 and May 31, 2016!
A new target segment has been added to the types of employees you can submit for tax credit. The new group is Long Term Unemployed and is available to all employees hired anytime in 2016.
With this provision ANY employer can currently submit all of their 2015 new hires for credit qualification!
This is a nearly unprecedented move by the IRS. Since the inception of WOTC in 1996, this is only the second time such an extension has been made available by the IRS.
RIGHT NOW is the absolute perfect time to get started and receive retroactive credits for all 2015 and 2016 new hires! This is the ideal scenario for all of you that were heavily considering WOTC last year but held off because of the pending renewal.
There’s only one catch! We Must get all of your 2015 new hires submitted ASAP! We don’t want you to miss any available Work Opportunity Tax Credits (WOTC) or have them delayed.
The official deadline to submit last year’s employees under this transitional relief provision is June 29, 2016, but we want to get your employees submitted ASAP before all the other companies in your state submit theirs. Procrastinating will increase the risk of missing credits or having your credits delayed by several months because other companies submitted before you. We will handle all the leg work for you, but we need to get started sooner rather than later.
To get an estimate of just how much your 2015 WOTC tax credits are worth, use our calculator HERE or contact us HERE and we’ll help you get started.
Don’t miss this opportunity and over-pay your 2015 taxes!
Progressive companies seem to have cracked the code of hiring teenage help and leveraging those employees as strategic assets. More specifically 16-17 year olds for seasonal help.
It’s true that there is a certain unflattering stigma associated with teenage employees, but it doesn’t mean that you should overlook this segment of the workforce. In fact, with an intentional plan you can sift through this unique talent pool and hire the best and take advantage of the benefits they can offer your company.
There are more than a few examples of teenagers behaving badly in their workplace scattered across the internet casting a shadow upon both their employer and fellow teen worker. This shouldn’t be a deterrent but rather an incentive to perfect your hiring process.
So why should you consider hiring more teens?
For starters, they have lower wage requirements than longer tenured employees resulting in lower overall payroll. Not to mention they seldom work enough hours to earn OT and often don’t receive the benefits of full time workers.
They can help expand your clientele to a segment of the population you may not have previously reached. Teenagers have dozens of retail options to visit after school, but they gravitate to those where their friends work.
You can begin relationships with quality individuals that become lifetime employees. The landslide majority of Chick-fil-A operators started working for the company during summers in high school.
The energy they have is both inspiring and infectious. Teenagers can often be labeled as lazy, but more often than not, it’s just boredom. Given a task and empowered to achieve it, you’ll be surprised at how creative and efficient they can be at problem solving.
As a final bonus, the Federal Government offers you a WOTC tax credit for each 16-17 year old hired during the summer. This could reduce your tax liability by up to $2,400 per teen hired.
These are just a few reasons to include teenagers in your candidate pool; especially for retail, seasonal help.
Progressive companies, like yours, have realized solid return on investment by carefully hiring teenagers. Teens help businesses diversify their workforce, attract young customers and increase your profitability. That means more bottom line, thanks to reduced payroll costs, sales potential and tax incentives.
If you’d like to learn more about how we can help your business improve your hiring and take advantage of the Work Opportunity Tax Credit (WOTC) program click here and we’ll be in touch shortly.
