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Issue: # 110
| February 26, 2014 |
 | | Work Opportunity Tax Credit Video |
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Dear :
Last newsletter we discussed the Work Opportunity Tax Credit (WOTC). This credit is available to employers hiring employees in certain eligible classes and paid out over $82 million to employers last year, click here for story. Although the WOTC tax credit has not been approved for 2014, we feel it will as it has since 1996. Employers should continue to apply within 28 days of the employee's hire date as if the credit has been approved.
As a result of the feedback that we have received, we have decided to add this as a service to our clients. Very simply we ask, that you add IRS Form-8850 to your new hire package, If you check any of the six questions, e-mail the form to us.
If we feel the employee is eligible, We will:- Contact with additional forms that need to be completed.
- Submit forms to the state workforce agency.
- Track hours to determine the amount of the credit.
- If the individual works at least 120 hours, the employer may claim a tax credit equal to 25% of the individual's first year wages, up to the maximum tax credit.
- If the individual works at least 400 hours, the employer may claim a tax credit equal to 40% of the individual's first year wages, up to the maximum tax credit.
Sincerely,
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Eligible new hires
Not just veterans
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- Veterans
- TANF Recipients
- SNAP (Food Stamp) Recipients
- Designated Community Residents (living in Empowerment Zones or Rural Renewal Counties)
- Vocational Rehabilitation Referral
- Ex-felons
- Supplemental Security Income Recipients
- Summer Youth Employee (living in Empowerment Zones)
More detailed list.  | | Dubuisson great shot |
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WOTC Tax Credit Amounts
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Veteran Target Group
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Maximum Tax Credit
| | Receives SNAP (food stamps) benefits | $2,400 | | | | Entitled to compensation for service-connected disability | | Hired one year from leaving service | $4,800 | | Unemployed at least 6 months | $9,600 | | | | Unemployed | | At least 4 weeks | $2,400 | | At least 6 months | $5,600 |
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Target Group
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Maximum Tax Credit
| | Short-Term TANF Recipient | $2,400 | | Long-Term TANF Recipient | $9,000 (over 2 yrs) | | SNAP (food stamp) Recipient | $2,400 | | Designated Community Resident | $2,400 | | Vocational Rehabilitation Referral | $2,400 | | Ex-Felon | $2,400 | | SSI Recipient | $2,400 | | Summer Youth | $1,200 |
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Work opportunity tax credit 2014
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The legislative authority for the WOTC program expired on December 31, 2013. In the past when the program's authority lapsed, Congress has retroactively reauthorized the program back to the date of expiration.
In anticipation of possible retroactive reauthorization, employers should continue to submit WOTC applications for all target groups to State Workforce Agencies.
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