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WOTC allows employers to claim a credit against their federal income tax liabilities for qualified employees.
WOTC can also be used to offset AMT (Alternative Minimum Tax).
Employers generally can earn a tax credit equal to 25% or 40% of a new employee’s first-year wages, up to the maximum for the target group to which the employee belongs. Employers will earn 25% if the employee works at least 120 hours and 40% if the employee works at least 400 hours.
The average benefit per employee is $2,400.00 and can be as much as $9600.00. That means potentially 10 qualified employees could yield a federal income tax credit between $24K – $96K.
Additionally, WOTC credits may be carried back one year and carried forward 20 years.
Incentives for Employers to hire have been a part of our country’s infrastructure since the early 1940’s. At that time most Hiring Incentives were focused on Veterans returning to work after periods of service. This continued to be the main focus for Hiring Incentives until the 1970’s and 1980’s when the focus was expanded to include Ex Felons, and Welfare Recipients.
There was a dramatic shift and expansion to Hiring Incentives in the late 1990’s throughout the 2000’s which opened the door for “Job Creation” as the focus for Hiring Incentives. As a part of this change the Work Opportunity Tax Credit (WOTC) was created in 1996 and has been modified, extended and consolidated with existing Hiring Incentives repeatedly since.
also see if your business qualifies for other Incentives to Hire:
Manufacturing Payroll Credit / Technical Job Tax Credit / Enterprise Zone Credits / Startup Tax Credits / Small Business Tax Credits
Many companies think their CPA or payroll company are already taking care of this for them.
Each month we work with over a thousand new companies. From our experience, the vast majority of companies are either not taking these types of tax incentives at all, or they are taking only small fractions of what is available.
If you are not completing a form 8850 with each and every new person you consider for employment, you are not taking advantage of this Tax Credit.
This process is more operational then it is accounting based. Because most CPA’s and even payroll companies are not involved in your interviewing and candidate process it’s rare that this is being taken advantage of.
Historically the steps necessary to qualify for the WOTC have been time consuming and burdensome.
We have made substantial investments in a proprietary technology process that relieves the employer of 90% of this burden
by automating most of the steps involved in prescreening and certifying candidates before hiring, as well as streamlining the submission of required documentation to State and Federal agencies.
Our online Client portal allows for a simple interface that any size company can take advantage of to avoid the paperwork, tracking, and submission headache that come with managing the WOTC program on their own.
Step 1
Activation
Complete this activation for immediate access to your Incentive Management System. Not only will we manage all of your Hiring Incentives, we’ll be able to search hundreds of Local, State, and Federal tax incentives that you may qualify for.
Step 2
Identify Benefit
Using our proprietary software within your client portal, we will identify hiring incentives for new hires, and existing employees.
Step 3
Results
Hiring Incentives are a recurring tax incentive. Most need documentation filed on your behalf quarterly. We will take care of all filing and submissions on your behalf through your Incentive Management System resulting in significant Federal and Payroll tax reductions and refunds.
Step 4
Ongoing Savings
By using your Incentive Management System, we can monitor tax incentives for your organization on an ongoing basis. Maximizing your potential benefit.
