Nancy Dischinat, Executive Director, Lehigh Valley Workforce Investment Board
Are you claiming your WOTC dollars?
Each year, tax credits dollars go unclaimed, despite the fact employers are hiring workers every day from the target groups designated by the Work Opportunity Tax Credits (WOTC) program. Barriers to employment for target groups such as: unemployed veterans, human service recipients and ex-offenders, could be a hiring advantage for employers! When you hire these candidates, you could receive thousands in tax credits. PA CareerLink Lehigh Valley is your workforce partner in assisting you with these candidates and programs.
Work Opportunity Tax Credits is an easy to use federal tax credit available to employers who hire individuals from target groups. WOTC is a great way for employers to reduce income tax liability. Under this program, nationally employers claim about $1 billion in tax credits each year and there is no limit on the number of individuals an employer can hire. The tax credit employers can claim depends on the certain group of the individual hired, the wages paid to that person in the first year of employment and the number of hours they worked. There is also a maximum tax credit that can be earned.
With various tax credit programs out there, employers are concerned that there are too many requirements and/or hoops to jump through for eligibility. There are only two major requirements with this program. The first is that new hires must work a minimum of 120 hours and secondly all forms must be submitted within 28 days of the new hire’s start date.
As stated before, there is no limit to the number of new hires. A few other positives of the program are that any size employer can benefit, employers decide on their own whom they want to hire and minimal paperwork is required to request the tax credit.
Saving money is another financial positive for employers. When working with WOTC, you can save a maximum tax credit ranging from $1,200 to $9,600. To benefit from the tax credits, you’re going to have to find some employees first. The list of who qualifies is more extensive than the three groups listed above. Employers can claim WOTC for the following targeted groups: Veterans (5 categories), TANF Recipients, SNAP Recipients, Designated Community Residents, Vocational Rehabilitation Referral, ex-felons, Supplemental Security Income Recipients and Summer Youth. This website offers more details about the target groups. http://www.portal.state.pa.us/portal/server.pt/community/employment_tax_credits/10569
There are 4 steps to apply for WOTC. The first is to complete page 1 of IRS Form 8850 by the day the job offer is made. Second is to complete page 2 of IRS Form 8850 after the individual is hired. Third is to complete ETA Form 9061. Fourth, applications are submitted electronically via www.cwds.pa.gov
The PA CareerLink LV and LV Workforce Investment Board are prepared to assist with WOTC program questions. Please call the Business Engagement Services Team at 610-437-5627 x136 for more information.