Work Opportunity Tax Credit:   The Work Opportunity Tax Credit (WOTC) is a federal tax credit available to employers for hiring individuals from certain targeted groups who have consistently faced significant barriers to The Consolidated Appropriation Act, 2021 (Section 113 of Division EE P.L. 116‐260) authorized the extension of the Work Opportunity Tax Credit (WOTC) until December 31, 2025. https://www.irs.gov/businesses/smal l‐businesses‐self‐employed/work‐opportunity‐tax‐credit#targeted Tax Credit Report:

• Reflects all certified employees and certifications received after last billing and report.
• Lists only certified employees who worked at least 120 hours.
• Credit amount calculated based upon the payroll data provided to TCG.
• WOTC is calculated at 25% of the first‐year qualified wages up to $6,000.00 when employed at least 120 hours but less than 400 hours.
• WOTC is calculated at 40% of the first‐year qualified wages up to $6,000.00 when employed 400 or more hours.
• 25% Tier: Represents the wages derived for employees that worked between 120-399 hours.
• 40% Tier: Represents the wages derived for employees that worked 400 or more hours.
• Provide to CPA or tax preparer immediately.

Certifications:

• Official document issued by the state DOL certifying employee as a member of a targeted group under the WOTC Program.
• Certification authorizes company to claim a tax credit upon certified employee meeting minimum retention requirement of 120 hours.
• Retain all records of certifications.

Claiming the Credit: The credit is a dollar for dollar reduction against the federal income taxes owed. As an example, if $100,000.00 in federal income taxes was owed and $60,000.00 in tax credits was received only $40,000.00 in federal income taxes would be owed.  IRS Form 5884: Form used report Work Opportunity Tax Credit for qualified first- and/or second-year wages they paid to or incurred for targeted group employees during the tax year. For S corporations the credits flow to Schedule K-1.  IRS Form 3800 General Business Credit:  Total WOTC amount is reported under General Business Credits. Limitations/ Reporting of Credits:   The credit is limited to the amount of federal income tax liability owed. Taxable business may apply the credit against its business federal income tax liability. Credits maybe applied and filed by:

• Amending federal income tax return.
• Carrying back the credit one year. A refund check in amount of tax credits would be sent.
• Claiming the credit the following year.
• Unused credits can be carried forward up to 20 years to offset future federal income liability and carried back one year.

Invoice:       

• Fee owed is based on % of the total tax credit calculated and processed.
• Payment must be received in full within 15 days.
• Due to increased processing fees for credit card payments please send payment via check.