What is the work opportunity tax credit?
What is the work opportunity tax credit?
I bet your current broker or tax advisor doesn’t even know about this. Another great reason to follow me or better yet, hire me and my team, your current premium won’t change! This federal law is very interesting and most business owners have no idea about this potential tax credit. It depends on the industry and who you hire, but it can really add up!
The Work Opportunity Tax Credit (WOTC) is a federal tax credit available to employers who hire individuals from eligible target groups with significant barriers to employment. The success and growth of this income tax credit for owners is beneficial for all who participate while increasing America’s growth and productivity within these markets. There is no annual limit on the amount of tax credit an owner can receive. The tax credit can vary between $1,200 to $9,600 per employee, depending on the target group of the newly hired employee and the number of hours worked in the first year. The new hire in the target segment must work 120 hours in the first year to receive the tax credit.
Target Groups:
• Unemployed Veterans (including disabled veterans)
• Temporary Assistance for Needy Families (TANF) Recipients
• Food Stamp (SNAP) Recipients
• Designated Community Residents (living in Empowerment Zones or Rural Renewal Counties)
• Vocational Rehabilitation Referred Individuals
• Ex-Felons
• Supplement Security Income Recipients
• Summer Youth Employees (Living in Empowerment Zones)
How to apply:
1. Complete ETA Form 8850 by the day the job offer is made.
2. Complete ETA Form 9061, or complete ETA Form 9062 if the employee has been conditionally certified as belonging to a WOTC target group by a State Workforce Agency, Vocational Rehabilitation agency, or another participating agency.
3. Submit the completed and signed IRS and ETA forms to your State Workforce Agency. Forms must be submitted within 28 calendar days of the employee’s start date.
4. Wait for a final determination from your State Workforce Agency. The determination will indicate whether the employee is certified as meeting the eligibility for one of the WOTC target groups.
5. After the targeted group, the employee is certified by the State Workforce Agency, file for the tax credit with the Internal Revenue Service.
Trek Insurance Group is more than your standard broker or traditional insurance agency. The difference is how we conduct business in a professional, fun and personal way while protecting your best interests, large or small. We are free-thinking and challenge the conventional insurance broker across the Arizona marketplace. Trek believes in common sense, rational principals and contesting the status-quo of insurance. Our way of doing business and out-of-the-box thinking from a practical, honest and realistic understanding helps our client’s operate and manage benefits costs and employee turnover within a company of any size. We don’t cling to doctrine, new or old. We don’t hold ideology over practically. We do what is right for the best interest of our clients.
