Good News! Work Opportunity Tax Credit (WOTC) Extended
Good news! As a part of the year-end spending package, Congress passed legislation extending the Work Opportunity Tax Credit (WOTC) for one year, through Dec. 31, 2020. The credit was scheduled to expire at the end of 2019. Many employers are thrilled with this news, since, according to the Department of Labor, about $1 billion in tax credits are claimed each year under the WOTC program. Historically, only large employers could take advantage of this program because of the administration that goes into it. But, that’s no longer the case. With technology improvements, Payentry makes it easy for employers of any size to take advantage of the credit and provides everything their CPA needs to file.
What is “WOTC”? It’s a federal tax credit that the government offers to businesses for hiring individuals from certain target groups that have historically had significant barriers to employment. The categories of workers that can qualify for the tax credit include the long-term unemployed, the formerly incarcerated, individuals with disabilities and military veterans. Other disadvantaged groups include those people living in government-designated rural renewal counties or empowerment zones and certain welfare-benefit recipients. Tax credits range from $1,200 to $9,600 per applicant. You can calculate what your tax credit could be, here.
How does the program work? During the hiring process, there are two forms the employer and the applicant must complete. Within 28 days after the applicant is hired, the employer must submit the two completed forms to the state workforce agency for a determination on the eligibility of this worker for the tax credit. Once the determination is made by the state, the employer can claim the tax credit by submitting IRS Form 5884 with the company’s tax return. See how easy it is to keep track of – CLICK HERE.
Even better news! Payentry can do all the work for you! For a small flat fee, we will do the screening through our applicant tracking program and provide all the necessary forms to get your company the maximum credits available.
If your company has not taken advantage of this program in the past, now is the time to consider participating! You may already be hiring individuals that qualify and you are missing out on an opportunity to lower your company’s tax payments. Contact us at email@example.com and we can talk with you more about the opportunities.