Work Opportunity Tax Incentives

What Are Work Opportunity Tax Incentives? 

Hiring incentives or Tax Credits have been in place since the mid-70’s. They were created to motivate employers to hire job seekers that have difficulty obtaining employment.

• The Federal program which began as Targeted Job Tax Credits (TJTC) became the Work Opportunity Tax Credit (WOTC) in the mid-90’s
• The WOTC program has evolved adding targeted groups and expanding to include various categories and demographics
• Federal zones were added and have been adjusted over the years to target certain disadvantaged areas

Many States have followed the Federal program by adding economic development areas

Tax credits range in value from $1,200 to over $9,000 per qualified hire

Large volume hiring companies have taken advantage of tax credits for years, now we make this valuable program available to small and mid-size companies through our streamlined cloud-based solution.  

If you’re like most companies, you already hire qualified candidates.

How Do I Benefit From Work Opportunity Tax Incentives? 

Many small to mid-size companies are unaware of these programs or do not realize they already hire qualified job seekers

Nearly any for-profit company (and some non-profit entities) can benefit from the government’s hiring incentive program

Your entity type defines how your accountant / CPA will apply the credit, but all benefit including:

• C-Corp
• S-Corp
• LLC
• Sole Proprietor

Tax credits off-set tax liability dollar for dollar.  Some companies use credits in their tax planning to off-set quarterly estimated payments.  Some companies use credits at the end of their tax year against annual tax liability.  In the event of no tax liability, tax credits can be carried forward for up to twenty years.  Consult with your tax professional for how to best use these incentives

Companies that achieve particular value from the program have an hourly workforce and volume hiring needs, however nearly every hiring / growing company can benefit

What is The Process? 

The life of a tax credit can be a year or more.  The process begins with screening your new hires and ends with delivery of a certified and calculated tax credit.  We manage this for you.

Large employers have taken advantage of the government’s program for years.  We simplified and integrated the steps into our job board.  We facilitate screening and through our technology, track certifications, manage calculation and deliver robust reports to use in tax application.

 

What Can I Expect? 

Tax credit results vary from company to company based on a variety of factors i.e. wages paid, hours worked, qualifying programs, retention, etc.

On average, hourly hiring companies can expect 20% to 30% of hires qualify for one or more tax credits

Example:  A company hiring 100 hourly employees annually, on average 25 hires will qualify for a tax credit.  Of the 25 hires qualified 20 will be certified.  Typically the calculated tax credit value (based on wages / hours) will be $1,500 to $3,000 per individual

Annual tax credits range between $20,000 and $50,000.

 

Already Do Tax Credits?

• If you’re like most companies that participate in the tax credit program, you are screening and applying for the tax credit as a step in the job application or on-boarding process.  You are “lucky” when you hire someone and get a tax credit.
• Now, you can be strategic!  Select from pre-screened tax credit eligible candidates in our hiring pool. And, view the candidate’s estimated tax credit value.
• How is this an improvement?  Your company can significantly increase tax credits achieved.

If you have a pool of equally qualified waitresses, cashiers, or baristas, the government wants you to have knowledge of a candidate’s eligibility and select the candidate with the highest tax credit value.