December 21, 2015

5-year WOTC Extension Announced

It’s official! The Work Opportunity Tax Credit (WOTC) program has been renewed for five years (2015 – 2019). Last week, Congress voted to extend the WOTC program as part of the Tax Extenders legislation, and received the President’s official signature of approval on December 19th.

This renewal is especially exciting as it is the first time in it’s history WOTC has received a 5-year renewal which is a testament to it’s success. Secondly, Congress has added a new target segment for Long Term Unemployed Recipients, which can qualify more of your employees and increasing your potential tax credits.
Here is the actual wording from the bill:

The term ‘qualified long-term unemployment recipient’ means any individual who is certified by the designated local agency as being in a period of unemployment which is not less than 27 consecutive weeks, and includes a period in which the individual was receiving unemployment compensation under State or Federal law.

This is precisely what employers have been waiting on all year. In a nutshell, the program provides participants tax credits up to $2400-9600 for each qualified, new hire brought on board. This renewal is a solid investment in the American dream and provides work opportunities for millions while providing businesses the capital to expand their businesses that will create even more jobs.

It doesn’t take long to figure out that this program can be a great way for companies to invest in their growth by significantly reducing their tax liability. To learn how much your potential tax savings might be, try our tax savings calculator here.

July 24, 2015

WOTC Renewal Update

The Work Opportunity Tax Credit (WOTC) program scored a big victory this week. On 7/21/15, the Senate Finance Committee voted 23-3 to pass a two-year extension of this important program. This means that the bill is now ready for a full Senate vote. Although this is only the first step, the near-unanimous support for WOTC legislation marks a huge step forward in a program which has awaited renewal since December 2014.

WOTC is an employment incentive to reward businesses who hire from several target groups that historically have faced barriers to employment. The tax credit awards businesses up to $2400-9600 for each eligible new hire. Applications must be received within 28 days to state workforce agencies.

We strongly advocate for this program as it has served American companies well. WOTC has helped businesses save thousands annually in tax liability. Moreover, it expands opportunities for job candidates most in need.

The program has passed one gateway and is en route for a Senate vote. We will keep you posted as new developments take place.

May 21, 2015

Kentucky Employment Tax Incentives

Corporations located in Kentucky may not be aware that they have state tax credits available to them in addition to the federal credits offered from WOTC. Hiring an unemployed resident could qualify you for as much as $100 for each eligible individual.

Businesses can qualify if their new hires are certified by the Office of Employment and Training as unemployed for sixty days prior to being hired into full-time employment. Individuals must also be employed full-time for 180 consecutive days during the tax year the credit is claimed. Full-time employment is defined as working 23 hours weekly or more.

The state of Kentucky considers applicants unemployed if they worked less than 23 hours weekly or 100 hours a month during the sixty days immediately prior to employment, and they must have had an employed status prior to the term of unemployed status.

There are a few exclusions to the program to be mindful of. Credits may not be claimed if the employee received federally funded payments for on-the-job training, is a relative of the employer, if the employer is an estate or trust, is a grantor, beneficiary, or fiduciary.

If your business is located in Kentucky, we can assist with educating and helping you obtain these applications and certificates. Just by making a few minor tweaks in your hiring process, you could claim extra tax savings. Give us a call today to learn more about these credits.

April 10, 2015

TANF: A primary component of WOTC tax credits

The WOTC program includes many target groups. Among these are TANF (Temporary Assistance for Needy Families) recipients, or qualifying persons receiving financial assistance. It’s highly likely that you may have hired a TANF beneficiary and not have known it. According to USDA statistics, in fiscal year 2014, SNAP recipients represented over $3 billion in available tax credits.

With the volume of TANF recipients in this country, you’ve probably hired untold numbers which met WOTC qualifications. Did you know that during the 2014 calendar year that nearly 36 million Americans received this aid? Since the 2007 recession, the number of families that have qualified for this financial assistance grew by 50%.

TANF is a financial assistance program for low income families that have children and for pregnant women in their last three months of pregnancy. The program provides temporary financial assistance while at the same time helps TANF recipients find jobs that will allow them to support themselves.

Hiring a TANF recipient could earn you up to $2,000 in tax credit for each new candidate. There are different qualifications for Long-Term and Short-Term recipients.

Long-Term Temporary Assistance for Needy Families (TANF) Recipient
To qualify for this target group, a new hire must be a member of a family that meets one of the following circumstances:

Has received TANF benefits for at least 18 consecutive months ending on the hiring date; OR
Has received TANF benefits for at least 18 consecutive or non-consecutive months after August 5, 1997, AND has a hiring date that is not more than 2 years after the end of the earliest 18-month period after August 5, 1997; OR
Has stopped being eligible for TANF payments during the past 2 years, because a Federal or state law limited the maximum time those payments could be made.

Short-Term TANF Recipient
A new hire qualifies for this target group, if the individual is a member of a family that received TANF benefits for any 9-month period during the 18-month period ending on the hiring date.

It’s important to note that State workforce departments must receive requests within 28 days of new hires’ start dates.

The great news is these people are easier to identify than you thought possible. By taking advantage of these, and making minor tweaks in your hiring process, you could save thousands in tax dollars. Give us a call at 563-583-2115 to learn how to get started or you can find out how much you have been missing in tax savings by using our free calculator HERE.

March 29, 2015

2014 WOTC Tax Extension Reminder

With tax deadlines looming, we thought it best to revisit the specifics of WOTC for 2014 and what implications that has on your corporate taxes.

A quick reminder that for 2014 you can file for WOTC tax credits by April 30, 2014. With this unique extension, states are backlogged and may require extra time to issue your credits.

For this reason many companies filed for an extension on their corporate taxes in order to easily allocate their 2014 WOTC credits once issued.

For the 2014 tax credits they must be applied in the following order.

2014 Tax liability
2013 Tax liability
Carry forward to the next year of liability (up to 20 years)

If you didn’t file an extension, you will still be able to file an amended return once your state has issued all tax credits for 2014.

You’ll want to make sure you discuss this with your tax preparer to make sure you properly claim your credits.

March 16, 2015

WOTC Extension Questions

By this time most everyone knows that The IRS recently announced Notice 2015-13, which will provide some much needed relief for employers seeking WOTC credits from 2014.

As we’ve mentioned before, 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. Again this is only for 2014, the WOTC program has waived its 28-day deadline to submit tax credit requests.

As we’ve had countless conversations with employers there are some consistent questions that have come up and we’d like to answer them here in case you might be curious.

When is the deadline for submitting last year’s forms?

April 30, 2015 is the deadline for submitting any new hires’ applications from 2014 only. All 2015 forms must be received within the regular timeframe of 28 days from new hires’ start dates.

Who is eligible?

All employees hired between January 1, 2014 and December 31,2014 are eligible to apply.

How often does this happen?

The rare extension has only occurred twice since WOTC was established in 1996. This is a great opportunity to recoup extra tax savings!

How far back can we go?

Any new hires made since January 1, 2014 are eligible.

When can I use the credits?

WOTC offsets federal income taxes and can be carried back to the prior year or carried forward 20 years.

There’s only one catch to this relief measure and that is the April 30, 2015 deadline. This means that ALL 2014 applications must be submitted by this date or they will not be processed.

To learn more about IRS Notice 2015-13 and how it applies to your business, email troyloney@taxcreditmgmtgroup.com now before time runs out.

March 10, 2015

SNAP: A Huge Part of WOTC Tax Credits

The WOTC program includes many target groups. Among these are SNAP (Supplemental Nutrition Assistance Program) recipients, or persons receiving food stamps. It’s highly likely that you may have hired a SNAP recipient or member of a qualified household. According to USDA statistics, in fiscal year 2014, SNAP recipients represented over $10 billion in available tax credits.

With the volume of SNAP recipients in this country, you’ve probably hired untold numbers which met WOTC qualifications. Did you know that roughly one in seven Americans receives this aid? Since the recession, food stamp recipients grew to over 23 million households. The number of children benefiting from the program has nearly doubled to over 15 million since the 2007 recession. All across the country, rural and urban citizens receive food stamps temporarily and long-term.

Hiring a SNAP beneficiary could earn you up to $2400 in tax credit for each new candidate. Qualified candidates must be between 16-39 years old and not have worked for your company before. State workforce departments must receive requests within 28 days of new hires’ start dates.

February 25, 2015

2014 WOTC Tax Credits Still Available

The WOTC program experienced some unique challenges in 2014 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.

The IRS recently announced Notice 2015-13, which will provide some much needed relief for employers seeking WOTC credits from 2014.

The problem that everyone has experienced is a loss of time resulting in missed credits due to the traditional 28-day submission window after a new hire’s start date.

With this provision ANY employer can currently submit all of their 2014 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.

In reality, this means that all WOTC participating employers can go back and double check that all of their 2014 new hires were submitted for credit. For those employers that haven’t participated before, this is the absolute perfect time to get started and receive retroactive credits for all 2014 new hires! This is the best scenario for all of those we talked to that were heavily considering WOTC last year but held off because of the pending renewal.

There’s only one catch to this relief measure and that is the April 30, 2015 deadline. This means that ALL 2014 applications must be submitted by this date or they will not be processed.

To learn more about IRS Notice 2015-13 and how it applies to your business, email troyloney@taxcreditmgmtgroup.com now before time runs out.

February 16, 2015

Long Term Unemployed Could Become A Part of WOTC

There are two proposed modifications to WOTC that could be invaluable for employers across the country. The first proposal is to add Long Term Unemployed as a target group, and the second is to make WOTC a permanent establishment rather than requiring annual renewal.

Senior NJ Democrat Bill Pascrell and NY Republican Tom Reed have re-introduced bill H.R. 481 to add the Long Term Unemployed (those unemployed for 27 weeks or more) to the WOTC target groups. Initial estimates suggest that the passing of this bill would add roughly 4.7 million people to be eligible for employment under the WOTC umbrella.
With each qualified hire being valued at up to $2,400, this addition would potentially increase available tax credits by $11.28 Billion! Keep in mind that these available credits are in addition to the other 10 target segments.

The second proposal came from President Obama when he added WOTC as permanent legislation in his Fiscal Year 2016 budget. Although WOTC has been around for decades, it has required congressional renewal every couple of years. Often times this has created delays and lapses while employers have to wait for credits earned months prior. What this really means is that employers can offset the cost-burden of the hiring and training period when bringing new hires on-board. A permanent program would give jobs to Americans most in need and add money to employers in return.

WOTC has been an invaluable tool for employers providing countless billions in tax credits since it’s inception. We welcome both of these proposed changes whole heartedly and look forward to the day we can report that they’ve been voted into existence.

If you’d like to learn more about how these proposed changes could impact your business, we’d love to chat, just contact us here.

February 6, 2015

Why Military Veterans Make Great Employees

It’s no secret the military veterans are prized employees, but have you thought about just how valuable they can be?

1. They have some of the best training in the world. Their job calls for operating all sorts of equipment and cutting-edge technology sometimes on a moment’s notice. With this practice, they have adaptability to quickly learn new technologies and skills necessary to succeed on the job.

2. They are experts in specific detailed communication. Imagine guiding a pilot landing a jet that is carrying a 500-pound bomb on a ship. Clear precise communication is key for the fate of the lives of those on the ship and the plane. How about giving instructions to an injured, foreign civilian who speaks no English? This scenario equips soldiers to interact sensitively and quickly across diverse cultures.

3. They’re the ultimate team player. Living together with a crew out at sea, in the desert, jungle or the forest has its perks, but room for discomfort, especially if you’ll be there for months at a time. Calm disposition and quick action, for the troop’s safety and morale, are imperative if you’re fighting enemy fire side by side with a fellow, injured soldier.

4. They’re singularly focused on mission objectives. This frame of thought helps veterans look at the bigger picture and focus on winning battles during the ultimate tests of distractions and emotional highs and lows.

5. They’re relentless in their approach because they don’t know how to quit. They have made the ultimate sacrifices, leaving behind family and friends at home, putting that on hold to defend citizens’ freedoms and lives. Military slogans, such as “Army Strong” and “Serve Before Self”, are just defining traits of their work ethics. This commitment translates to dedication and persistence in the work place.
Not only have they been trained to know how to do all the things listed above, but they’ve also implemented their training in real-life, stressful, high stakes situations. In reality, you can’t find any civilian that is as trained and experienced as former military personnel.

In order to honor the service of our patriotic service men and women our government has made some fantastic incentives for you to hire military veterans.

When companies hire soldiers returning from active duty, they could be eligible for up to $2400-9600 in tax credits. Hiring unemployed veterans could qualify businesses for as much as $5,800 while providing jobs to disabled servicemen and women rewards business up to 9,600 over a two-year period. Plus, more pending, veteran hiring incentives are on the voting agendas in Washington.

For now, this is a great opportunity to give back to those who have served. The reward is a well-rounded employee, thus saving your business hiring and training costs, and a lucrative tax credit, all for your bottom line.

To find out how much you’ve been missing in tax credit savings, you can use our free calculator here.

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