As a CPEO, you are taking a lot of the workload off the shoulders of the businesses you serve. But there’s one extra step that could add great value for your customers: Helping them apply for Work Opportunity Tax Credits. You could be adding tens of thousands of dollars back to their bottom line each year. And nothing cements a good business relationship like free money!
Your Customers Need Education and Information to Claim WOTCs
Although your firm may serve as the employer of record, the SBEA (Small Business Efficiency Act) clarifies that it’s your customer who maintains the right to claim these tax credits. But chances are, they don’t know these credits are available—or how to go about applying for them. If they do choose to pursue WOTCs, it’s your duty under the SBEA to provide the required information. Here’s a quick look at what this may include:
- A list of State Certified Employees for each year.
- Qualifying first year wages and hours for State Certified Employees.
- First and second year wages and hours in the case of TANF.
Chances are, you’ll also need to provide a calculation of the WOTC tax credits earned. Many small businesses are unable to calculate these tax credits without guidance.
Is There a Downside for CPEOs Providing WOTC Processing Services?
All this free money does come at a cost—to your administrative team. WOTC processing involves quite a few moving parts. As the CPEO, your firm would need to:
- Have new hire employees complete form 8850 (on or before the date of hire).
- Complete form 9061 for all potentially eligible New Hired employees.
- Submit these forms to the appropriate State Workforce Authority for each customer.
- Track all the Pending WOTC Eligible New Hires and the current status of those WOTC Eligible EEs, (i.e., Sent to State, Needs Additional Info, Declined, Certified….)
- Attempt to overturn any State denied WOTC Eligible EE within the 1-year deadline provided.
- Track wages and hours for all WOTC Eligible EEs. (This is needed to produce the calculation of the WOTC credits).
Fortunately, processing tax credits means your customers are getting money they would otherwise miss out on. They are likely to be fine with paying an additional fee to have you take care of this for them. In fact, it can be a selling point for becoming and remaining a loyal customer!
Demonstrate the Value for Your Customers
Reporting is a highly effective way to show the value of WOTC for customers. We recommend that CPEOs provide monthly & annual reports of certified credits and track the pending credits remaining to be certified. When customers know how much their tax credits will be, it helps them with tax planning.
When customers see how much money is coming back to them through partnering with your organization, it’s an obvious reason to bring you on as their co-employer. In fact, even smaller companies can defray much of the cost of your services simply with the money they make back in tax credits. Talk about making it easier to close a sale!
Make WOTC Easier for Your CPEO
What if you could skip the work involved in processing WOTCs and still get all the benefits for you and your customers? Rather than adding a whole new set of work processes for your administrative team, you can have Efficient Hire do all the heavy lifting. We have the processes and technology in place to integrate seamlessly with your current hiring/onboarding practices to capture every Work Opportunity Tax Credit your customers are owed.
Ready to learn more or get started? Contact our team and start making your happy customers even happier.