There is a lot of talk on the federal and state level about offering tax credits to businesses for job creation. It’s a great idea, and probably no business owner would turn one down.
Are you aware that there already is a tax credit for hiring job seekers who face specific barriers to finding work?
If you’re not taking advantage of the Work Opportunity Tax Credit, you should be! It could be money that you’re leaving on the table, and in this economy, none of us can afford to do that!
The plan may seem a bit complicated, but once you get a handle on it, it’s relatively simple.
You don’t need an outside person to administer it for you. It just becomes part of your overall interview and hiring process. It simply means that when you hire someone who falls in one of the 12 qualifying groups, you will receive a credit on your taxes.
You can utilize the credit over and over again, as there is no limit to the number of hires you can make under the program!
You could get a credit of up to $9,000!
- In most cases, the tax credit per individual is $2,400, based on the qualified wages paid during the first year of employment.
- In the case of a disabled veteran, the credit is as high as $4,800.
- For long-term TANF recipients, the credit can be as much as $9,000.
As you can see, the tax credits can really add up!
There are 12 categories of qualified employees under the WOTC program.
Other than the ones previously mentioned, they include:
- 18-39 year old food stamp recipients
- 16-17 year old summer youths
- Vocational rehabilitation referrals
- SSI recipients
- Hurricane Katrina victims
- Disconnected youths.
Due to the economy, we’re finding many more individuals applying for work that fall into one of the qualifying categories. The same will probably be true for you!
Here’s how the WOTC process works:
The process is really simple:
- Your new hire fills IRS Form 8850, and also either Form 9061 or 9062.
- The forms are sent to the Olympia office of Employment Security, who administers the program in our state.
- They verify the employee’s eligibility under the program.
- You get a tax credit!
Chances are that you are already hiring individuals who qualify under the WOTC program, but you don’t realize it, because you’re not having them complete the paperwork during the interview process. Simply incorporate the forms into your application packet, and begin collecting your tax credits today!
You can find additional helpful info about the WOTC program here.