WOTC provides a tax credit up to $9600 for organizations that hire qualified employees from any of the target groups.
Hire WOTC-Qualified Employees
Individuals in the groups listed below often face barriers to employment:
- TANF recipients
- SNAP recipients
- SSI recipients
- Long-term unemployment recipient
- Designated community and empowerment zone residents
- Vocational rehabilitation referral
How Much Is A WOTC Tax Credit?
You can qualify for a tax credit up to $9,600 for each new hire who is WOTC certified and works the required minimum hours or days for their group.
The credit is calculated as a percentage of wages paid.
A taxable business may apply the credit against its business income tax liability. The standard carry-back and carry-forward rules apply. See the instructions for Form 3800, General Business Credit, for more details.
For qualified tax-exempt organizations, the credit is limited to the amount of employer social security tax owed on wages paid to all employees for the period the credit is claimed.
WorkforceHUB Simplifies WOTC
Get all the credit you are eligible for without any of the work by making WOTC screening part of your standard hiring process. WorkforceHUB onboarding steps new hires through a series of questions to verify WOTC eligibility.
The WorforceHUB WOTC service complete IRS forms. Then it submits the necessary paperwork to your state workforce agency.
Does My Business Qualify?
There are no restrictions on business type or industry. Non-profits can claim WOTC against Social Security taxes
What Is The Average Credit Per Employee?
The average WOTC credit is about $1200 per employee. The maximum credit is over $9,000 if your meet all the criteria.
Don’t Delay If A New Hire May Qualify
When you hire a staff member that might qualify, don’t delay. The WOTC filing deadline is within 28 days of their first day of work. If you use WorkforceHUB for WOTC, you don’t have to worry about the deadline.
Can I Carry Forward Unused WOTC?
Yes, WOTC carry-forward rules are the same as rules for general business credits.
The Credit Varies Per Target Category
The amount of the WOTC credit varies according to the target group to which the employee belonged. Some groups qualify you for a 25% credit. Other groups qualify you for a 40% credit.
The number of hours the works during the year also impacts the amount.
You can earn a 25% credit if the staff member worked at least 120 hours. This jumps to 40% if they worked 400+ hours.
Does The Employee Get Something?
The employee gets a well-designed job at your outstanding company. You get the tax credit. The status of the staff member as a member of a target group creates your eligibility for the credit.
You provide employment to an individual who may otherwise have difficulty securing a job.
Talk to us about WOTC today.
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