PART TWO The Work Opportunity Tax Credit (WOTC) Program How

PART TWO The Work Opportunity Tax Credit (WOTC) Program How Employers Can Apply for, Claim and Manage WOTC Part Two of a Three-Part Series
PRESENTATION BY WALTON MANAGEMENT SERVICES, INC.

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BRIAN DEVIDO

Agenda
 What is the Work Opportunity Tax Credit (WOTC) Program  How Do Employers Apply For the WOTC Program?  How Do Employers Manage the WOTC Program?

What is the Work Opportunity Tax Credit (WOTC)
 Federal tax credit incentive designed to encourage private sector employers to create jobs and training opportunities for disadvantaged individuals from specified target groups with significant barriers to employment.
 WOTC focuses on: • basic entry-level skills training • long-term employment, and • retention
 Everyone hired is a potential source of WOTC tax credits

WOTC Program: Tax Credit Savings

# Annual Hires

Eligibility Rate

Conversion Rate

Avg. Cert Value

300

15-20%

50%

$1,000

500

15-20%

50%

$1,000

1,000

15-20%

50%

$1,000

5,000

15-20%

50%

$1,000

Annual Tax Credits $22,500-$30,000 $37,500-$50,000 $75,000-$100,000 $375,000-$500,000

1Assumption = 15-20% of your new hires are eligible for the tax credit ² Average value of a certification = $1,000. Companies hiring individuals from one of nine target groups receive $1,500 to $9,600 in tax credit savings per qualified employee

Please note, the estimator above does not include an additional benefit if the tax credit certification obtained is also a Long-Term Family Assistance –LTFA (formerly WTW) certification. LTFA certifications can more than double the value of your credit. The maximum value of each LTFA certification is $9,000. Estimator above also does not take into account larger wage bases, which may result in larger maximum credit value for certain veteran categories.
 WOTC Program is used to offset federal income tax  $1,500 to $9,600 in tax credit savings per qualified employee  Program typically is not retroactive
• The last two hiatuses provided for retroactive capture from the previous expiration date to a specified date of a few months from the notice.

This is a proprietary, confidential Walton Management Services, Inc. document Unauthorized distribution is prohibited. Copyright WMS 2015

Work Opportunity Tax Credit (WOTC) Program: A Quick Review
To qualify for WOTC, employees must
◦ Meet the requirements of one of the nine target groups ◦ Complete and submit timely an IRS Form 8850 (e-signature is accepted) ◦ Work a minimum of 120 hours
To receive a tax credit, a company must
◦ Hire a potential WOTC certified individual ◦ Submit the appropriate paperwork to a WOTC state agency within 28 days of the new hire’s start date ◦ Obtain all appropriate back up documentation for that individual ◦ Track hours and wages for certified individuals ◦ Calculate tax credit available based on hours and wages, which alter percentage available
This is a proprietary, confidential Walton Management Services, Inc. document Unauthorized distribution is prohibited. Copyright WMS 2015

WOTC Program Target Groups
 Currently, there are nine (9) target groups for which your employees may qualify:
• Certain Veteran Groups • TANF Recipients • Long Term 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)
This is a proprietary, confidential Walton Management Services, Inc. document Unauthorized distribution is prohibited. Copyright WMS 2015