In times of turmoil like the experience with the COVID-19 pandemic, we know that there will be additional tax credits available to help lessen the financial burden on companies nationwide. Therefore, any income tax-paying retailer hiring employees should be taking advantage of the Work Opportunity Tax Credit (WOTC).

Don’t Throw Away Potential Tax Relief Dollars

Many FMS clients receive tax credits in excess of $100,000 annually. Congress signed a long-term extension of the WOTC into law on December 18, 2015, as part of a larger spending bill. Now, there is much more certainty for employers moving forward as they try to secure these credits. It is the moment to target groups like US Veterans and the long-term unemployed. The new law extends the Work Opportunity Tax Credit through 2019, giving employers an opportunity to get tax relief.

What is the Work Opportunity Tax Credit (WOTC)?

WOTC is a tax credit incentive offered by the government to incent employers to provide jobs to certain target groups including U.S. veterans.

Which employers should use WOTC?

Any employer who is typically profitable and is hiring new employees.

How much can you save?

On average, one qualified candidate could be eligible for a credit in the amount of $2,400.  Typically, the credits range from $1,200-$9,600 per qualified candidate.

What are the target groups?

Recipients of Temporary Assistance for Needy Families (TANF):

A member of a family receiving TANF payments for any nine-month period during the eighteen months prior to hire

Veterans Receiving Food Stamps:

A veteran who is a member of a family who has received food stamps for at least a 3-month period during the 15 months prior to hire

Ex-felons:

Economically disadvantaged individuals who have been convicted of a felony or released from prison in the 12 months prior to hire

Designated community resident:

An individual aged 18 through 39 residing in an empowerment zone or rural renewal county

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Vocational Rehabilitation Referrals:

Individuals who are, or have been, clients of the rehabilitation services commission or the department of veterans’ affairs

Summer Youth:

High-risk summer youth, ages 16-17, who are hired between May 1 and September 15 and live in a federal enterprise zone or enterprise community

Food Stamp Recipients

Individuals between the ages of 18 through 40 who have received or reside in a family that has received food stamps for the previous 6-month period or for at least 3 of the last 5 months

SSI recipients

Individuals who are receiving Supplemental Security Income benefits for any month ending with the 60-day period ending on the hiring date

How do you participate?

If you hire one or more individuals from a target group, you have to complete the corresponding forms. Then, submit them within 28 days of the hire. Employing these individuals will be helping your community. Moreover, it means taking big chunks out of your tax liability.

FMS has offered a WOTC program, in partnership with HR Screening Services, for the past several years and we are ready to assist you in capturing future tax credits. We have obtained millions of dollars in tax credits for our clients. Simply contact us, and will discuss the next steps with you!