If you’re a business owner, hiring manager, or higher-up, you need to know about the Work Opportunity Tax Credit program made available by the Internal Revenue Service. Often abbreviated as the WOTC program, this could be an incredible opportunity for your business to receive a tax break. Here are some important ways that your business can maximize from the WOTC program.
What is the Work Opportunity Tax Credit?
At a high level, the Work Opportunity Tax Credit (WOTC) is a Federal tax credit that employers can take advantage of by hiring people from certain target groups. The people that the WOTC requires you to hire typically face hardships when it comes to finding a job, so the government incentivizes businesses like yours to give these people a chance by providing you with tax credits. Many business owners find that once hired, these individuals are some of their finest employees who are grateful for an opportunity.
So how can your business make use of the WOTC tax credit program?
1. Screen Every Potential Employee
Many companies don’t maximize on the WOTC because they don’t screen everyone they hire for a potential tax credit. Many employers don’t have the extra time and bandwidth to follow the simple process the IRS lays out, and they miss out on their opportunity for tax credits. If you are vigilant and screen every potential employee, and then file your paperwork in a timely manner, you can be sure you don’t miss any credit opportunities.
2. Use Form 8850 Properly
To earn your tax savings, you’ll have to follow a process set forth by the IRS that requires you to file Form 8850 within 28 days after anyone eligible for the credit begins work. It’s a sad fact, but it’s common that a business that doesn’t file in time or files incorrectly won’t receive the income tax break they’re expecting.
3. Educate Yourself on Who Qualifies
The WOTC is in place so that potential employees who consistently face significant barriers to employment have an opportunity to work. Some examples are qualified veterans, designated community residents, and ex-felons just to name a few. The full list is on the IRS website. When you educate yourself on who is eligible, you can even tailor specific job listings seeking these types of individuals to give them a chance to work for you. You’re not only helping needy families, but you’ll also reduce your business income tax liability. It’s important to remember that the tax credit varies for the different target groups within the WOTC.
Quentelle is the Best Way to Maximize the WOTC Program
Truly, the easiest and fastest way to do all three of the tips listed above is to use the turnkey WOTC software that we here at Quentelle provide.
Through our partnership with Walton (a leading provider of tax credits), our software will provide you with a streamlined solution that will screen every potential employee easily and virtually automatically. Additionally, you’ll be able to E-sign and file your Form 8850 electronically.
When you use Quentelle, you’ll have a WOTC program that is effortless and gets you the maximum tax credit for your income tax liability. We can also help tax-exempt employers claim their WOTC benefits properly.
Our software is smart and simple. Schedule a demo today by filling out a form, or giving us a call.