June 28, 2017

WOTC Target Groups

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.

August 22, 2016

The 2015/2016 Transitional Relief Opportunity Has Been Extended

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!

May 26, 2016

Don’t Avoid Hiring Persons with Disabilities

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.

March 31, 2016

Don’t Miss This Last Chance to Earn 2015 Tax Credits

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!

March 14, 2016

Are Today’s Youth HR’s Best Kept Secret?

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.

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.

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Fear: lackluster performance compared to other workers.

Fear: Poor attendance and increased turnover

Fear: Increased exposure to litigation and liability.

Fear: High supervision demand and increase coworkers’ responsibilities.