TAX CREDITS FOR HIRING QUALIFIED NEW HIRES
THE FEDERAL WORK OPPORTUNITY TAX CREDIT
The Work Opportunity Tax Credit (WOTC) is a federal program, created by Congress to encourage employers to hire individuals facing employment barriers. There is no limit to the number of new hires that can qualify and the qualified employees can be filling either new or existing positions. The tax credit is available to for-profit employers hiring individuals from target groups and on a limited basis to tax-exempt organizations hiring qualified veterans.
The credit is calculated as a percentage of wages over a one to two-year period, depending on the reason for qualification.
Depending on candidate qualifications, the tax credit can range from $1,200 to $9,600 per certified hire, but most categories are eligible for a credit of up to $2,400. There is no overall company limit. The qualified employee must work 120 hours before credits can be received.
Our process has been designed to be as seamless and efficient as possible, requiring minimum effort from your staff, while achieving the most credits possible.
WOTC target groups
- Disabled Veterans
- Unemployed Veterans
- Designated Community Resident
- Vocational Rehabilitation Recipient (requires release form)
- Supplemental Nutritional Assistance Program (SNAP) (Food Stamps) Recipient
- Supplemental Security Income (SSI) Recipient (requires release form)
- Recipients of Temporary Assistance to Needy Families (TANF)
- Summer Youth
- Long Term Unemployed
- Screening – This occurs on or before the date of job offer and can be completed by paper, via phone through our Interactive Voice Reponses (IVR), or through our web application. Additionally, we can integrate with your Applicant Tracking System (ATS) or Hiring Management System (HMS). Our system is mobile friendly and allows for electronic signatures. Many eligible hires screen themselves out of the process due to misunderstandings related to the Form 8850 questionnaire. Our screening process has been designed to maximize the percentage of individuals who qualify, while reducing screening time.
- Certification – EU will prepare and file all required paperwork within the mandated timeframe (28 days from hire) and follow each application through to certification. Upon receipt of a determination from the state, EU will provide immediate notification to all parties as to the outcome of the certification.
- Tracking Credits – After securing certification from the state, EU will calculate tax credits for certified individuals based on payroll data provided by you.
- Reporting – EU will provide quarterly reports with details for each applicant with certification results by location, division, entity, etc. for analytical and budgetary purposes.
- Tax Filing – EU will provide an annual report detailing the data needed to properly register the tax credits on your Corporate Tax Returns. Credits can be carried back 1 year and forward 20 years.
Other tax incentive programs handled by our expertise:
- State Training Grants (Usually given as cash grants)
- State and Local Tax Incentives