Did you know that the work opportunity tax credit extended through 2019? This is the kind of news that it is easy to miss since these tax extensions are usually buried in the fine print of other acts or bills. But this is good news that you should pay special attention to if your organization has high turnover.
We’ve found our retail, hotel, and food service industry clients are particularly likely to see a big benefit from the WOTC program. Here are a few reasons why:
● They hire often even if their overall workforce size isn’t enormous.
● They typically provide on-the-job training so they can hire workers from a variety of backgrounds as long as these individuals have a good attitude.
● For seasonal industries, they often have the opportunity to hire at-risk youth.
● Some positions don’t require a pristine background check; so, recently rehabilitated individuals can have a shot at a decent job.
● Their workers often put in a high enough number of hours within the first 12 months of employment to qualify for tax credits.
Since there is no limit on the number of qualifying new hires for the WOTC program, employers don’t have a cap on the amount they can receive in incentives to offset federal income tax liability. For some categories, such as unemployed veterans with service related disabilities, the tax credits can be as high as $9600 per worker. With the Work Opportunity Tax Credit extended through 2019, this is an ideal time to start capturing these savings.
Skipping Forms Means Missing Money
Missing the opportunity to complete the appropriate forms that identify qualifying new hires and submitting the appropriate documentation to receive credits means losing money for your business. Even at the low end of the scale (which starts at a $1200 credit for hiring disadvantaged youth over the summer), the incentives can make a real difference.
Adding WOTC processing to the onboarding process doesn’t have to be difficult. The forms aren’t overly complicated and new hires and HR can easily navigate them—especially in digital form with electronic submission. We provide this service to many of our clients and they are often surprised by the results. There isn’t even a monthly fee to implement the program. Since our billing model is simply a small percentage of the credit, we only make money when you are saving money.
Work Opportunity Tax Credit Extended Through 2019: Who Qualifies?
There are a number of eligible groups, and more are sometimes added. This is why it pays to make sure your onboarding system always uses the most current versions of each form. Here are some of the current qualifying categories for the work opportunity tax credit extended through 2019:
● Unemployed veterans (including those with disabilities)
● TANF, SSI, and SNAP recipients
● Individuals referred through vocational rehabilitation programs
● Ex-felons
● Community residents (including youth) in empowerment zones/rural renewal zones
● Long term unemployed (at least 27 consecutive weeks on unemployment benefits)
To learn more about the process and get started on WOTC for your business, contact us. You have nothing to lose unless you fail to act!