Did You Hire Employees In 2014? Don’t Miss Out On This Tax Credit.
If you hired employees in 2014, you may be leaving money on the table in the form of tax credits. If you’re not familiar with the United States Department of Labor’s Work Opportunity Tax Credit (WOTC), or if you think you missed your opportunity to file for the credit, keep reading…Start the Conversation
Who Qualifies for the Work Opportunity Tax Credit?
The Work Opportunity Tax Credit is a Federal tax credit available to employers for hiring individuals from certain target groups who have consistently faced significant barriers to employment. These groups include:
- Qualified Veterans
- Long-term or Short-term Temporary Assistance for Needy Families Recipient
- Supplemental Nutrition Assistance Program Recipient (Food Stamps)
- Designated Community Resident (i.e., federal empowerment zones (EZ) and rural renewal counties (RRC))
- Vocational Rehabilitation Referral
- Qualified Ex-Felon
- Supplemental Security Income Recipient
- Summer Youth Employee
For further descriptions on the qualifications, please refer to https://www.doleta.gov/business/incentives/opptax/PDF/Target_Group_Eligibility.pdf.
Tax Credit Amount
The amount of the tax credit employers can claim will depend on the following:
- The target group of the individual hired,
- The wages paid to that individual in the first year, and
- The number of hours the individual works.
Based on these, the credit can be as high as $9,600 for each individual (generally calculated as 25% or 40% of the new employee’s first year wages based on target group).
File Claims by April 30th
The initial guidelines of the WOTC required employers to file claims for the credit within 28 days of the date of hire. However, Notice 2015-13 was recently issued which provides employers an extension to file the necessary Form 8850 to the Designated Local Agencies (DLA) by April 30, 2015 for all new hires in 2014 who can be classified in one of the above mentioned groups. This means there is still time to claim credits and reduce your tax bill.Talk to An Expert
Talk to Your Tax Expert
Signature Analytics does not provide tax services; however, we act as the accounting department for our clients so we maintain consistent communications with their tax preparers. We have worked with a number of tax experts we would gladly recommend who can guide you through this process and help claim your credits. If you’re looking for a tax expert for your business, contact us today and we would be happy to assist.
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