Work Opportunity Tax Credit
Are you a business owner? If you find yourself taking chances on hiring a diverse group of people – such as veterans, ex-felons, individuals with long-term unemployment, or maybe some summer youth – you may be entitled to a credit with the IRS known as the “Work Opportunity Tax Credit”.
Essentially, the IRS offers a federal tax credit to employers who hire individuals typically known to have difficulties finding legitimate employment. This is done to “incentivize workplace diversity and facilitate access to good jobs for American workers.” Below is the full list provided by the IRS; if you would like more information on the specifics of each group or a more in-depth explanation for any part of this blog posting click here.
- Qualified IV-A Recipient
- Qualified Veteran
- Designated Community Resident
- Vocational Rehabilitation Referral
- Summer Youth Employee
- Supplemental Nutrition Assistance Program Recipient
- Supplemental Security Income Recipient
- Long-Term Family Assistance Recipient
- Qualified Long-Term Unemployment Recipient
The IRS website states that employers can “claim the Work Opportunity Tax Credit (WOTC) for all targeted group employee categories… if the individual began or begins work for the employer after December 31, 2014 and before January 1, 2021.” However, before the employer can claim any credit, they must file “Form 8850, Pre-Screening Notice and Certification Request for the Work Opportunity Credit, with their respective state workforce agency within 28 days after the eligible worker begins work.”
If you would like to learn more regarding what to do if qualified see the link provided earlier in this post. To set up a consultation call Marlies Y Hendricks CPA PLLC at either 716-694-3500 or 910-769-8730.
The above information is of a general nature only and should not be relied upon for specific situations. Click here for additional tax services information.