Category: Work Opportunity Tax Credits

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WOTC Calculator

What is a WOTC Calculator? And Where to Find One!

Did you know that a federal tax credit is available to businesses that hire certain workers? It is known as the Work Opportunity Tax Credit, or WOTC. If you’re looking to hire new employees, it is worth taking the time to see if you are eligible for this tax credit. Both taxable and certain tax-exempt employers can be eligible for the WOTC program.

The WOTC is one of the more significant tax credits and can be worth up to $9,600 per hire of certain qualified veterans! The average tax credit is about $1,200 for workers from other qualified groups.

In order to claim the credit, the employer and potential employee will need to fill out the Pre-Screening Notice and Certification Request for the Work Opportunity Credit (IRS Form 8850) and submit it when the job is first offered. Once the designated local agency determines the employee belongs to one of the targeted groups, the employer, not the employee, will have to file more paperwork.

If this sounds complicated and like a lot of paperwork, don’t worry, there is help available. There are WOTC screening and certification solutions to help streamline this process, like the excellent example from Quentelle.

In this blog post, we will give an overview of a WOTC calculator and how to use a calculator to help you determine if you are eligible for the credit.

What is a WOTC Calculator?

A WOTC calculator is a simple online tool that can help you determine if your business is eligible for the Work Opportunity Tax Credit (WOTC). The WOTC is a federal tax credit that businesses can claim after hiring workers belonging to certain groups of workers who historically have a difficult time finding employment, such as veterans, ex-felons, or individuals from disadvantaged backgrounds.

To use a WOTC calculator, you will need to input some basic information about your business and the workers you are considering hiring. The calculator will then generate an estimate of the tax credit your business could claim.

There are a number of different WOTC calculators available online. Quentelle conveniently includes a calculator directly on our WOTC webpage.

You can also find a WOTC calculator on the IRS website. The IRS calculator is slightly more complex to use than some of the other options, but it can be a helpful tool if you’re trying to determine your exact tax liability.

If you want a more reliable estimate of the tax credit, you should consult professionals. Companies like Quentelle offer services to help businesses maximize their general business credit and tax benefits. Taxable employers and some tax-exempt employers might discover they can claim a significant amount by using a WOTC calculator.

While a WOTC calculator can give you a good idea of whether your business is eligible for the tax credit, it’s important to keep in mind that the final decision will be made by the IRS. As a federal tax credit calculator, businesses can use this tool to help expand their scope successfully. If you have any questions about the WOTC or how to claim it, be sure to speak with your tax advisor or a WOTC solution specialist.

What Are the Fundamentals of Using a WOTC Calculator?

When determining if a business is eligible for the Work Opportunity Tax Credit (WOTC), a few key factors come into play. First and foremost, businesses must ensure that the employees they are claiming have worked a minimum of 120 hours (400 hours for a larger claim).

Additionally, the credit is only available for the first year of employment; meaning any qualified wages beyond the first year do not count. The WOTC is designed to incentivize businesses to hire individuals from specific target groups who often face significant barriers to gaining employment.

Finally, the credit amount varies depending on how many hours the employee works; 25% of qualified first-year wages (up to $6,000) for those employed and worked at least 120 hours, but fewer than 400 hours, and 40% of wages for those employed and worked 400 hours or more.

By considering all of these factors, businesses can better determine if they are eligible for the WOTC and how much they may be able to claim it. Although these might seem like complicated conditions, they are worth it, especially when it comes to computing overall income taxes and payroll taxes.

The WOTC can greatly help businesses looking to hire from specific target groups. With the right tools and guidance, any business can take advantage of this tax credit to save money on taxes and offset the cost of employment. Eligible employees will also benefit from WOTC tax credits as they can encourage businesses to consider hiring from different workforce groups.

How is it Calculated?

The WOTC amount is calculated based on the number of hours that an employee works and wages they earn.

To calculate the WOTC, businesses will need to input some basic information about their business and the workers they are considering hiring or recently hired. The calculator will then generate an estimate of the tax credit your business could claim.

These estimates are based on the current tax laws and are subject to change. For the most accurate estimate, businesses should speak to a tax professional.

What Are the Benefits of Using a WOTC Calculator?

There are a number of benefits to using a WOTC calculator. Let’s explore them below:

1. A WOTC Calculator Can Help Businesses Determine If They Are Eligible for the Tax Credit

One of the benefits of using a WOTC calculator is that it can help businesses determine if they are eligible for the Work Opportunity Tax Credit. The credit is available to employers who hire individuals from certain target groups, such as veterans, ex-felons, and food stamp recipients.

If your business hires someone from one of these groups, you may be eligible for a tax credit of up to $9,600 per qualified employee. To find out if you are eligible, you can use the WOTC calculator on the IRS website or on Quentelle.

2. A WOTC Calculator Can Help Businesses Calculate the Amount of the Tax Credit They Could Receive

Calculating the amount of tax credit you are eligible for can be complicated. The WOTC calculator can help you determine the amount of tax credit you may be able to claim.

To use the calculator, you will need to know the number of employees you have hired, their start date, and their target group.

The calculator will then give you an estimate of the tax credit you may be able to claim. It’s important to calculate this ahead of time so that you can budget for it. Calculating the amount of tax credit ahead will also help you avoid any surprises come tax time.

3. A WOTC Calculator Can Help Businesses Plan for the Future

If your business is eligible for the Work Opportunity Tax Credit, you may be able to claim it for up to two years. This means that you can use the WOTC calculator to plan for the future and budget accordingly.

You can also use the calculator to estimate how many employees you will need to hire to maximize your tax credit. You can save money and time in the long run while focusing on other aspects of your business.

The WOTC calculator is a valuable tool for businesses. It can help you determine if you are eligible for the tax credit, calculate the amount of the tax credit, and plan for the future. By using a WOTC calculator, you will be able to save money and time. So, what are you waiting for? Start using a WOTC calculator today!

Contact Quentelle

If you are looking for a reliable and user-friendly WOTC calculator, look no further than Quentelle. We offer a free online WOTC calculator that can help you determine your tax credit eligibility and possible amount. Simply enter your information, and our calculator will do the rest!

As part of our partnership with Walton, we can guarantee that our WOTC calculator is one of the most comprehensive and easy-to-use tools on the market. What’s more, we provide a streamlined solution to screen potential employees for WOTC eligibility. Plus, our team of experts is always available to answer any questions you may have!

Our goal is to help you take advantage of opportunities that can help your business succeed.

Why Choose Us?

At Quentelle, we understand that Human Resources is a vital part of any successful organization. That’s why we offer a suite of HR solutions powered by an award-winning technology platform.

Our solutions include screening for Work Work Opportunity Tax Credits and other point-of-hire credits, verification of employment and income, administration of unemployment benefits claims, unemployment tax consulting services, and more. We also offer a partner-focused approach that delivers the best possible experience for our clients.

If you’re looking for the best HR solution on the market, look no further than Quentelle. You can be confident that you’re getting the most comprehensive and user-friendly solution available. Contact us today to learn more!

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WOTC best practices

The 3 Golden Rules of WOTC Best Practices

Did you know that over $1 billion of tax credits are claimed under the Work Opportunity Tax Credit (WOTC) program every single year? That number is staggering, but it’s great to hear since the program encourages companies to hire people who can otherwise have challenges finding employment for various reasons. WOTC allows veterans, people who get public assistance, and people with disabilities, among others to secure employment while businesses earn valuable federal tax credits for hiring and retaining them. But what is most important for your business as you consider your WOTC best practices? In this article, we’re going to show you some golden rules when it comes to best practices for the Work Opportunity Tax Credit.

WOTC Best Practices

Here are just a few of the things to keep in mind:

1. Pre-screen all New Hires

Many opportunities for a WOTC are missed. That is because the screening process isn’t enforced or integrated during your job application or onboarding workflow.  According to the WOTC guidelines, employees must be screened on or before their job offer date. Having your new hires complete their WOTC pre-screening ensures you meet the guidelines and never miss an opportunity.

2. It’s Worth the Time and Effort

Some companies adopt an attitude that things like the WOTC aren’t for them. That is simply because they think it’s a complicated or time-consuming process. Exploring your options and eligibility for the WOTC credit is absolutely worth it in every case. On average, nearly twenty percent (20%) of new hires are eligible for some sort of WOTC credit. There also isn’t a limit to how many people you can hire that would earn you a WOTC credit. And, with a reduction of federal income tax liability as much as $9,600 per person, it is definitely worth the time and effort.

Additionally, consider the fact that you can automate and streamline your WOTC process entirely. Of course, you can do that with a solution powered by Quentelle’s technology.

3. Don’t Rely on Paper Submissions

If you’re still relying on paper submissions for your WOTC, you’re deeply behind the curve and are increasing your chances of missed opportunities substantially. Paper forms are also risky because information can be missed during the submission process, and there’s only one copy. Additionally, you must mail all of your paperwork with a postmark that is on the day of your employee’s start date which can be inconvenient.

The Gold Standard as a Golden Rule

Here at Quentelle we’ll be so bold as to say that the final golden rule when it comes to WOTC best practices is to use our best-in-class ForeSite software platform. Don’t risk missing out on thousands in credits, and come to love our simple suite of robust, easy-to-use tools.

Our software is safe and simple. Schedule a demo today and let us show you the gold standard in WOTC software.

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what is WOTC

WOTC 101: The Who, What, & Why

You may have heard the term “WOTC”, but you’re not quite sure what it means. Or maybe you generally know that it has something to do with taxes and credit. But, if you’re being honest, you’re unsure what the precise details and specifics are. If so, you’re not alone.

In this article, we’re going to talk to you about the absolute basics of WOTC, who qualifies, and why it’s one of the most underutilized opportunities for tax credits for most businesses.

Let’s talk about the what, who, and why of WOTC.

What is WOTC?

The WOTC (the abbreviation for the phrase Work Opportunity Tax Credit) is a federal program that gives tax credits to companies that hire people who otherwise can face challenges to secure employment.

It is a federal tax credit program that was originally put in place in the mid-’90s (1996). And, it has been continually extended since then. It focuses on helping people such as ex-felons, veterans, and those who receive support from places like the Supplemental Nutrition Assistance Program (SNAP, or commonly known as food stamps), to name a few.

Overall, WOTC is in place to promote the hiring of people who may otherwise not be able to find a job.

Who is WOTC For?

Work Opportunity Tax Credits benefit people who are looking for employment as well as companies who hire them.

In terms of the people that you could hire to potentially qualify for the WOTC, there are many criteria that someone could meet. There is quite a bit of nuance and specifics. But, many credits fall into the two main categories of veteran target groups and non-veteran target groups.

Non-veteran target groups include anyone who was previously convicted of a felony. They also include people who have been unemployed for a period that is formally considered long-term for starters. Furthermore, it includes anyone who is receiving SNAP assistance and those who are considered to be recipients of Long-Term Family Assistance (that meet certain timeframes and criteria). Those are just some of the non-veteran target groups that WOTC is designed to benefit.

Veteran target groups typically serve those who have a service-connected disability. Other WOTC categories target unemployed veterans. There are also considerations to keep in mind regarding their hire dates and their discharge or release date. Additionally, any veterans who are members of a household that received SNAP assistance can also be eligible.

Why WOTC?

In addition to giving an individual an opportunity and hiring an employee that may prove to be a valuable asset, there are also benefits to your company financially. When you hire someone eligible for a WOTC, you reduce your federal tax liability — often significantly, per eligible employee hired.

There are many opportunities to apply for WOTC tax credits, but there are companies still missing out.

Here at Quentelle, we specialize in a simple and smart way to get you every WOTC credit you’re entitled to. Let’s schedule a demo and we’ll show you how.

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WOTC providers

WOTC Providers: How To Find the Right One

When you engage with the Work Opportunity Tax Credit (WOTC) Program, your company has an opportunity to do two things. Firstly, you can help people gain employment who may otherwise find challenges doing so. Secondly, you have the opportunity to gain federal tax credits from $1,200 to $9,600 per WOTC eligible employee you hire (depending on their exact situation).

The best way to ensure that you’re getting every tax credit possible is to not try to manage the process alone. It is, however, the best to find WOTC providers to assist you. But how do you know what to look for in a provider? We’ll give you some important things to look out for so you can choose the ideal partner for your business.

Your WOTC Screening Solution Should Be Simple to Use 

Be sure that whoever you partner with for your WOTC needs has a solution that’s optimal at finding tax credit opportunities and effortless for you. WOTC doesn’t have to be complicated. Choose a partner who offers to handle 100% of the workload on completing the eligibility pre-screening process, e-signing, and filing of all forms (like Form 8850). Also, choose someone who will give you an analysis of the amount you should be estimated to save.

Optimal Results

Be sure that your WOTC provider can get you optimal results when they’re screening for your tax credit opportunities. They need to be able to leverage many various integrations. They also need to interface with reputable payroll, onboarding, and applicant tracking systems. This is the only way to offer a truly in-depth and robust tax credit screening experience. It is quick, easy to use, and doesn’t miss a single opportunity. When looking for a WOTC provider, be sure they’ll leave no stone unturned when it comes to finding your company tax savings.

Proven Track Record

Don’t trust a WOTC provider that can’t prove their results. Some providers, while experienced, aren’t on the cutting edge of what’s possible technologically and consequently deliver non-optimal results.

Here at Quentelle, not only are we passionate about staying on the cutting edge of WOTC regulations and the technology to leverage opportunities, but we have a proven track record like no other company. Take for example the results we got for a national grocery retailer. They were having issues getting the results that were possible at their size with WOTC. By adding enhanced processes to their WOTC screening and building a new workflow, the results were staggering. By using our simple and robust ForeSite platform along with our guidance, they were able to increase their WOTC credit by 100% over their former provider.

When choosing a WOTC provider, be sure you’re discerning, and make them prove their track record.

All WOTC Providers Are Not Created Equally

By using our WOTC services, you can rest assured that your company’s tax credits are in excellent hands. You can rest assured that we’re getting you every credit that you’re entitled to and will deliver results in the most simple and efficient way possible. We’re delivering the smart you want and the simple you need.  Let’s schedule a demo today and we’ll show you how.

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: WOTC Legislation

WOTC Legislation 2021: Everything You Need to Know

The Work Opportunity Tax Credit (WOTC) is a federal government tax credit that was established to help reduce the employment barriers faced by certain groups.  This includes select veterans as well as individuals receiving government assistance such as SNAP (Supplemental Nutritional Assistance Program) and TANF (Temporary Assistance to Needy Families), to name a few. There is new proposed WOTC legislation introduced in 2021, that enhances the program.  We’ll go over what this means for employers and discuss how you take advantage of these enhancements.

Quentelle’s premier team of employer tax credit experts are here to help you decode the legalese of these new WOTC legislation updates, and find a solution to maximize those benefits for your business.

What is WOTC?

WOTC was first introduced to Congress in 1996 as the Welfare-to-Work Tax Credit Act. The legislation was created with bipartisan support and signed into law by President Clinton on August 22, 1996. It passed both chambers of Congress without a dissenting vote. Since then, there have been several changes made to this credit including an extension in 2005.

Who is Eligible for WOTC?

There are currently nine different target groups that are eligible to participate in this program. The list includes:

  • Qualified veterans
  • Designated Community Residents (DCR)
  • Vocational rehabilitation referrals
  • Ex-felons
  • Summer youth workers (over 16 years old, but under 18)
  • SSI beneficiaries
  • SNAP recipients 
  • TANF recipients 
  • Qualified long-term unemployment recipients

Businesses can receive a tax credit ranging between $1,500 and $9,600 for each certified target group member hired. The maximum amount of WOTC money that an employer can receive is limited by a wage cap based on the target group they belong to.  For instance, a SNAP recipient can earn an employer a maximum credit of $2,400, while a disabled veteran that is also unemployed for 6+ months can earn $9,600 in tax credits for the same employer.

The Work Opportunity Tax Credit Program has undergone several modifications since its inception. However, this time it may be changing significantly.

WOTC Legislation 2021: What’s New?

The House of Representatives Ways and Means Committee approved tax provisions for the Build Back Better Act on September 15th, 2021. The approved provision proposes several changes to the tax code and includes significant enhancements to WOTC effective from the date of enactment of the Build Back Better Act, through December 31st, 2022.  

The following is a summary of the proposed changes:

  • Credit Amount Increase – increases the credit per certified employee (for most target groups) from $2,400 credit to $10,000
  • WOTC; a 2-Year Credit – $5,000 per certified employee, for years 1 and 2, for a maximum credit of $10,000
  • Re-hires Eligible –  through a temporary waiver of the rehire exemption 
  • No Change for Certified Summer Youth – these hires remains the same as in the current program

While these proposed changes are still far from becoming law and may be temporary in nature, it could be the equivalent of putting WOTC on steroids.  Next steps will involve intense negotiations with the Senate for a final bill. 

If you’re interested in a provider who can help you maximize these benefits, look no further than Quentelle.

Quentelle’s HR Solutions Make WOTC Easier

Quentelle delivers a suite of HR solutions powered by an award-winning technology platform. Our WOTC service bundles include screening for WOTC, verification of employment and income, administration of unemployment insurance (UI) claims, and UI Tax consulting services. We are here to help you understand your hiring requirements under the new WOTC legislation in 2021. Contact us today to learn more about what Quentelle can do for you.

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man using magnifying glass to calculate finances

What Are Point of Hire Tax Credits?

Tax credits are dispensed when a business does something valuable within the community. Giving to charity and providing child care, for example, earn tax credits. So too, can hiring. This is called the Point-of-Hire (POH) tax credit. Is your business claiming your full savings?

A business’ role as an employer is among its most important functions to the nation. Certainly, manufacturing shoes or selling groceries is important, but employing the populace is essential to the flow of industry. Each person on your team is one more person who is employed vs. unemployed. One more person receiving a reliable income and contributing their skills to the greater economy. Each time your company hires a new employee, you benefit the economy through that employment.

Employment is the path out of many situations of economic disadvantage and dependency. This is especially true in vulnerable and struggling population groups. From elevating youth into a career to employing veterans and the disabled, both federal and state governments offer business tax credits based on the opportunities offered to target-group employees. Accessing these credits requires each company to choose a Point of Hire tax credit solution to screen, verify, apply, and claim the credit each year.

What is the Point of Hire Tax Credit?

The Point of Hire tax credit is a type of tax credit given to businesses for hiring employees in disadvantaged situations. Targeted groups include veterans, SNAP and SSI recipients, and youth from Empowerment Zones, among others who benefit acutely from access to employment and career opportunities. POH tax credits are usually offered at the state level. Point of Hire tax credit is based on and paired with the WOTC (Work Opportunity Tax Credit) provided by the federal government.

The POH tax credit is available to all businesses, rewarding opportunities provided during standard hiring procedures. The credit was designed to promote diverse hiring and encourage businesses to hire from disadvantaged populations who have the most to gain from employment opportunities.

How to Get Your Company’s POH Tax Credits

The first step of claiming your POH tax credits is pre-screening for qualification. Your business must qualify, and credits only apply to new hires within specific target groups. It’s important to carefully screen your POH applications to ensure that each claim is qualified for the tax credit and how much. You must file your pre-screening application within 28 days.

POH and WOTC Target Groups

Which newly hired employees qualify your company for Point of Hire tax credits? The target groups are usually identified by their access to financial services due to poverty-line existence. This may be from a medical condition, legal status, or disadvantageous financial circumstances. The POH and WOTC programs are designed to promote these disadvantaged groups by providing a tax credit to companies that help employ these groups and improve their prospects through career advancement.

  • IV-A & TANF Recipients
    • Temporary assistance for needy families
  • Qualified Veterans
  • Ex-Felons
  • Vocational Rehabilitation Referrals
    • A person with physical or mental disabilities is referred to the employer while in a rehabilitative service plan.
  • Summer Youth Employees
    • 16-18-year-old youths from Empowerment Zones, enterprise communities, and renewal communities
    • Employed between May 1 and Sept 15
  • SSI Recipients
  • Long Term Family Assistance Recipient
  • Qualified Long-Term Unemployment Recipient
    • Unemployed for longer than 27 weeks

POH vs. WOTC: What’s the Difference?

  • WOTC:
    • Work Opportunity Tax Credit is a Federal Program
  • POH: 
    • Point of Hire tax credits are a type of tax credit offered by federal and state governments.

One of the biggest questions in Point of Hire programs is the relation to WOTC. When you look up either acronym, the other appears. They seem to be synonymous. Is Point of Hire the same as Work Opportunity Tax Credits? The answer is yes, and no.

WOTC is a point-of-hire program provided by the federal government to all eligible companies who employ certain financially at-risk groups. It is also an inspiring policy that many states took up individually. State programs that piggyback this and offer additional incentives are usually referred to simply as Point of Hire instead of using the federal Work Opportunity designator.

WOTC is the federal policy inspiration for most POH state programs. However, linguistically Point of Hire is the category, and WOTC is a point of hire style tax credit.

What is Required for POH Tax Credits

To claim your Point of Hire tax credit, you’ll first need a certificate of eligibility. To get this, you send a Form 8850 pre-screening application. If you get a certificate back, you can claim the credit with a Form 5884 or 3800. The most time-consuming part of the process is pre-screening to ensure that your circumstances qualify by the POH tax credit. The IRS also recommends that qualified tax-exempt employers not change their calculations in the assumption that the credit will be approved.

Pre-Screen to Determine Your POH Eligibility

The first and very important step is to confirm that your recent hire meets eligibility requirements. A close investigation may be necessary to determine all related factors and qualifiers. This includes very data-sensitive details about each new hire’s financial and personal status, information that must be respected and closely guarded while you have it, and may not be legal to discuss during job interviews for reasons outlined by the EEOC.

Fill and Submit Form 8850 to Request an Eligibility Certificate

Once you have determined internally that a hire is POH eligible, complete and file Form 8850, Pre-Screening Notice and Certification Request for the Work Opportunity Credit within 28 days of the first day of work, you will need to identify and outline each of the qualifying factors to expect a certificate of POH tax credit approval.

Claim the POH Tax Credit with Form 588-C

After receiving a certificate,  file a tax-exemption claim against the employer’s Social Security tax with a Form 5884-C or possibly a 3800 based on your circumstances.

Quentelle’s Point of Hire Tax Credit Solutions

Is your business missing out on potential POH tax credit exemptions? Capable employees are often included in target groups in the process of overcoming any disadvantages without mentioning the process to coworkers. However, certain fact-checking can provide you with greater resources to benefit more new hires and better career development programs for tax purposes.

The Quentelle team is here to help you through every step of the POH tax exemption process. Our POH tax exemption solutions include pre-screening, form submission, certificate acquisition precise tax exemption claim filing. To schedule a demo or a consultation with our business tax credit experts, contact Quentelle today.

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Woman looking at visual candidates on her projected screen

What to Look For in Your Human Resources Business Solution

Human Resources continues to be one of the most essential departments in the business world. Without it, your employees wouldn’t have access to the proper tools they need to stay successful.

This is why your HR department needs smart business solutions to keep the workforce thriving. With the right technologies, your HR can help prevent turnover and create more engagement among employees.

However, if you feel like your HR team has slipped behind technologically, take a look at some key things to look for as major solutions.

Verification of Employment Solution

One essential task HR takes on is verification of employment. This also usually involves income requests, requiring considerable organization based on the complex data involved. You need top-tier tech solutions to organize it all, plus keep all that sensitive information safe.

Many companies outsource this task to third-party companies. Not all companies do a good job, especially if not more focused on comprehensive HR technology.

Your best solution is going through VeriSafeJobs, offered through Quentelle, and bringing more superior reporting capability to your operations. The use of VeriSafeJobs lets you enjoy advanced metrics, so all employment verifications are thorough. A smart and simple user experience also helps with learning curves.

It’s also worth noting that VeriSafeJobs has unmatched client support, so your HR team gets questions answered fast. Privacy is taken seriously with FCRA compliance.

Simplify Unemployment Claims

Your HR group already knows the complexity of dealing with unemployment claims through your employees. The process was once very protracted, leading to possibly exhausted HR workers keeping up the pace. Most of this resulted from adhering to filing deadlines, creating issues when sending claims by regular mail.

Now you can simplify it by using ValeU NSN, a partnering company with Quentelle. This works by digitizing the entire unemployment claims process. Your company should be able to send these claims electronically, so you never miss deadlines.

The result of this is getting a week’s head-start on claims, so they’re filed sooner. Response times are ultimately faster as a result.

ValeU NSN is made for Fortune 100 companies, though any-sized company finds benefits using this solution. Implementation should also be simplified when you work with the right consultant.

Reduce Unemployment Tax Complications

Your HR department probably wouldn’t argue that dealing with unemployment taxes is one of the most complex tasks they’ve ever done. A considerable burden here is the overly complicated tax rules in each state, usually creating inaccurate data.

Our partnership with ValeU Group provides more accurate figures, so you never have to worry about tax penalties again. The benefit here is Vale U Group has more extensive knowledge of state tax rates, hence having a real unemployment tax expert in your corner.

Expect them to hunt vigorously for errors and provide the most accurate reports. These are real state tax experts who work as outsourced advisors.

Working with them, you’re guaranteed accurate unemployment tax information. Plus, you gain a dependable consultancy team on all other tax matters.

Simplify Your WOTC Program

Taking advantage of tax credits is no doubt a vital part of your business. A WOTC program is beneficial not only for you but to those you hire who have barriers to employment.

Otherwise known as Point-of-Hire tax credits, getting WOTC set up can take a lot of time for your HR team. Much of this is the pre-screening process, not including waiting to sign the 8850 form.

Our partnership with Walton gives you access to quality tax credit experts who can save you more than if letting HR handle it. Walton simplifies the process by sending digital questionnaires your employees fill out. Based on their answers, Walton finds ways to bring double the savings possibly. 

Now you can speed up the eligibility pre-screening, plus get help with other tax credits you overlooked. Read about how our partnership with Walton saved a national grocery chain double the amount from what they initially thought.

Improve Your HR Analytics

Your HR staff likely already use analytics of some sort, but how detailed are they? Not all analytic programs are great at providing the granular information HR employees need to help other company employees. When HR doesn’t see the whole picture of what’s going on, it only frustrates those they’re trying to help.

Our HR analytics engine keeps your HR workers in the know. It all starts with tapping into big data and organizing it in the most efficient ways. You can expect to bring more optimal employee performance using a better approach to big data.

Improving this further focuses on utilizing artificial intelligence to compile all the large amounts of data coming in. AI has truly advanced tenfold from just a few years ago. Now it can help organize metrics in a truly more intelligent way. Best of all, AI scopes out business trends you probably can’t see without more help.

Rounding this out is our metrics platform is fully integrated into the HR solutions suite. This enables your HR team to access all data from one source rather than from disparate data silos. Accessing information all in one place makes for more productive HR workers rather than add to their stress.

Bring a Digital Transformation to Your HR Department

Based on the above tools, you can see that a digital transformation must keep up with business challenges in today’s times. HR duties are far more complex today than a decade ago. 

Finding the right technology is the biggest hurdle. Another challenge is finding tools that integrate, so HR workers don’t have to search from multiple sources to answer critical questions.

We take technology seriously at Quentelle, where our sophisticated big data program is now renowned worldwide. Through that, we’ve incorporated AI and other emerging technologies to help advance companies to new plateaus.

Customizing is also at the center of our mission since every company’s HR department is different.

Contact us to learn more about how we can improve your HR team’s work by scheduling a demo.

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health medical worker woman holding vaccine and syringe.

News Update: Recent Changes to Point-of-Hire Tax Credits

On Wednesday, April 21, 2021, President Joe Biden announced a refundable tax credit available for select businesses that pay employees that need to take time off to get vaccinated for COVID-19.  This is part of the administration’s effort to involve employers to promote vaccination.

“Today we hit 200 million shots,” Biden said. “It’s an incredible achievement for the nation. I’m calling on every employer, large and small, in every state to give employees the time off they need with pay to get vaccinated,” said the President.

Here’s what we know about it so far:

  • The tax credit will apply to businesses with fewer than 500 employees
  • The tax credit amount equals up to two weeks (80 hours), limited up to $511 per day for each employee, and $5,110 in the aggregate at 100% of the employee’s pay rate
  • The tax credit is available between April 1 and September 30, 2021. 
  • Tax credit is refundable, meaning the employer is entitled to payment of the full amount of the credit if the tax credit amount exceeds the employer’s share of the Medicare tax
  • Employers can claim the credit on using IRS Form 941 – Employer’s Quarterly Federal Tax Return

This tax credit was authorized under The American Rescue Plan Acct of 2021 (ARP) which was signed into law on March 11, 2021.

 

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A Brief Guide to State Unemployment Taxes

Sifting through unemployment tax law is a difficult and time-consuming task. The heart of this problem is that each state has its own set of unemployment tax rules and regulations and is also subject to federal laws, which are standard across all 50 states. 

Interpreting unemployment tax law is a complex undertaking as it is; the COVID-19 pandemic has added multiple layers of complexity to the process. Now, with additional legislation like the CARES act and FFCRA, it can be challenging to know where to turn when you have questions about your company’s unemployment tax obligations. 

In this article, we’re going to look at the critical components of unemployment tax law, discuss how current Coronavirus relief legislation modifies those existing rules, and establish a list of quality resources that you can turn to to get your important questions answered.  

Unemployment Tax: Key Things You Need to Know

Unemployment tax was first established under the Federal Unemployment Tax Act (FUTA) of 1939. This piece of legislation, which was created in response to the Great Depression, has evolved to address the modern workforce’s needs. The law was designed to offset unemployment’s social and economic impact by placing a portion of the cost onto employers in general. 

FUTA funds unemployment by collecting a payroll tax. However, it should be noted that this tax is only levied against you as a business owner, not against your employees’ paychecks. While the amount of tax that the federal government collects has changed over the years with updates to the legislation, the way that the tax is assessed has remained the same. Through 2020, the tax rate was set at 6% of the employee’s first $7,000 in wages per year. That means that the employer takes 6% from a minimal, predetermined amount rather than the employee’s overall salary. It should be noted that the tax is not assessed on employees who make $1,000 or less per calendar year. Tax is also not collected on employees aged 21 or under. 

The basic method for figuring out your company’s unemployment responsibility is:

  • $7,000 x 0.06= $420/employee/year
  • $420 x total number of employees= unemployment tax obligation

The current FUTA standard also makes a provision for a 5.4% tax credit, which results in a tax bill of $42 per employee every year. To qualify for the credit, your company must pay state unemployment tax and file form 940 (which is a yearly requirement anyway) with the IRS.  

The challenge to employers comes with state unemployment taxes, as every state administers its own unemployment program, and imposes an employer-funded tax levy. Below, we’ll provide a more comprehensive guide to available resources that can help you determine the rules for your particular state.   

When figuring your unemployment tax burden, you should inquire if certain types of payments are excluded from the overall calculation. Those types of payments include:

  • 401(k) contributions
  • Life Insurance
  • Fringe benefits and per diem payments
  • Childcare allowances

Employers are required to pay their unemployment tax quarterly throughout the year.

A Wrench in the Works: the CARES Act

Along with the COVID-19 pandemic, there came a surge in unemployment cases nationwide. At one point, the US economy suspended or eliminated more than 22 million jobs. Several legislative remedies were passed into law, including the FFCRA, which extended the definition of emergency paid leave. The CARES act offered additional unemployment insurance up to $600 dollars per week. There is an old saying, however: there’s no such thing as a free lunch. 

While the CARE Act served as a lifeline for many struggling families, there are tax implications to receiving that kind of governmental assistance. Employees who failed to set aside taxes might find themselves without their expected refund. 

For employers, the CARES act results in additional paperwork and due diligence. While the federal government fully funds the unemployment insurance itself, each state has its own mechanism for carrying out the program, complete with qualification requirements and reporting. The bottom line? Unemployment tax is already muddy water; pandemic-related legislation just opened the floodgates.  

Resources to Help

So the burden of understanding unemployment benefits and their associated tax burden falls to the employer. But with each state in charge of its own rules —on top of federal requirements— that’s no easy task. Information differs on a state-by-state basis, and even then, it can be difficult territory to wade through. Where to begin? 

The single best place to start your search is with the United States Department of Labor (DOL). They have a page set up specifically for employers that links to each state’s unemployment insurance program. This site gives employers a contact list at a glance and helps empower HR and accounting staff to find good, quality information on a state level.

To understand how unemployment insurance —including the CARES act— works for the employee, the DOL also offers a website geared toward the workforce filled with valuable information and necessary forms.  

For information on federal unemployment programs, the top-level governmental website, USA.gov, has an unemployment-related directory filled with information related to numerous national programs as well as additional high-quality resources. 

If, for some reason, the government-curated resources don’t answer your question, or you find them obtuse and difficult to use, numerous third-party organizations such as the Tax Foundation strive to bring up-to-date information to the American workforce, including employers. 

Enlisting Personalized Help

Understanding tax laws is difficult no matter what type of tax you’re working with. There is no substitute for getting advice from a professional resource. The Quentelle platform is proud to partner with the ValeU Group to provide unemployment tax planning services through our technology and consultancy expertise. For more information, please contact us today. 

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What Are Point-Of-Hire Tax Credits And Other Tax Credits?

Tax credits are always important for businesses in the challenging times we live in. While WOTC (Work Opportunity Tax Credits) are still available on a federal level, Point-of-Hire credits are also available in many states.

What should you know about Point-of-Hire credits, though? Take a look at our guide on how they work and how much potential tax credit savings you can enjoy. 

We’ll also look at other useful tax credits to consider throughout the year.

You can also find recent updates on Point-of-Hire credits from Quentelle and we will work to keep you up-to-date as things change moving forward.

How Much Money Could You Save with Point-of-Hire Tax Credits?

The savings your business could muster with Point-of-Hire tax credits range from a few hundred dollars to as much as $35,000 per employee. It all depends on the state where this credit is available.

So far, these credits are only available in eight states: Arizona, California, Illinois, Louisiana, New Mexico, New York, South Carolina, and Washington. Time-frames for claiming the credit all vary based on your particular state.

In Arizona, tax credits up to $9,000 are possible for each new net quality job created. It works over a three-year period with $3000 in credit per year. Credits of up to $9,600 are available to employers in California, with the renewal of WOTC credits occurring recently.

A list of other credit savings possible in states participating in Point-of-Hire credits:

  • Illinois: Tax credit equal to 40% of first-year wages if employees work more than 400 hours. In the second year, this credit goes up to 50% while working the same hours.
  • Louisiana: A 25% tax credit ($1,500) of qualified first-year wages for employees working 120 hours. This goes to 40% ($2,400) for employees working 400 hours or more.
  • New Mexico: Credits here are 40% on first $10,000 wages in the first year, then 50% of the first $10,000 earned in the second year.
  • New York: $1,500 is available in credits here to individuals who worked at least 120 hours, followed by $2,400 when working a full 400 hours.
  • South Carolina: Credits between $2,400 to $9,600 are available, with no limits on how many employees your business hires in a year.
  • Washington: Each qualifying hire here can get a credit up to $2,400, plus $9,000 for long-term family assistance recipients.

What is a Welfare-to-Work Tax Credit?

More federal tax credits are available beyond WOTC and the limited Point-of-Hire credits. The Welfare-to-Work credit is still a popular option since it helps bring businesses credits hiring those on government assistance.

In a more challenging time economically, this type of credit can bring a real sense of accomplishment in helping to reduce unemployment in America. What makes it so effective is it was enacted at the same time as WOTC back in 2007.

Using both of these tax credits can end up being a major benefit to your company in any tax year. Both are likely to stay active on a federal level indefinitely.

What Tax Credits Benefit Employees?

There are several different types of tax credits that can benefit the employees of a company and help them maximize their income. Informing employees about these tax credit opportunities not only increases their net earnings but can also help businesses retain financially satisfied employees.

Earned Income Tax Credit

Employees can take advantage of an EITC if they earn a low to moderate-income. It works more like a refundable tax credit for your workers, except it sometimes delays tax refunds.

Any delays on usual tax refunds with this credit are due to an IRS law requiring a bit of a wait. Still, it’s very beneficial for lower-wage workers in your company. Keep in mind employees with children are the ones who stand to get the biggest credit.

For 2021, credit ranges on an EITC go from $543 to $6,728, which is contingent on filing status and how many children a family has. One great thing about the EITC is employees can get credit from the last several years if they didn’t realize they qualified for it over that period of time.

Lifetime Learning Credit

Many of your employees may be seeking an education while working for you. If so, they can get a Lifetime Learning Credit. These go up to as much as $2,000, giving significant savings for your valuable workers.

Part of that education they’re getting might be related to bettering their own jobs. Obtaining credits on tuition and any other education expenses greatly benefits them, or their spouse. An employee can also use this on a dependent.

Individuals can take this credit if their educational expenses are at least $10,000. On an income level, an individual has to make under $69,000 to officially qualify.

The credit goes beyond ordinary tuition and allows one to also write off any additional fees associated with getting an education.

Saver’s Tax Credit

Another great tax credit is this one where employees can help save more money for retirement. It all depends on their adjusted gross income requirement. As with EITC above, this credit is designed for those with lower to moderate incomes. At one time, this was known as a Retirement Savings Contributions Credit.

To use this for 2021, a head of household can get 50% of their contributions if making under $29,625 per year. A married person filing jointly can also take 50% of contributions if making $39,500 or less.

Employees can’t take any credit if they make more than $49,500 as a head of household. For a married person, no credits apply if they make more than $66,000.

What if You Have No Tax Liability?

An interesting thing about federal tax credits is some of your employees can still take advantage of one if not owing taxes. They might still qualify for $1,000 in tax credits, meaning they could get a $1,000 refund as a result.

While these scenarios are rare, it might occur if having employees who are volunteering at the moment rather than taking direct pay.

Always remember that to claim any tax credits, you need to fill out Form 1040 at the IRS. Schedule EIC is another form to fill out if claiming the EITC and listing dependents.

Do you need to learn more about Point-of-Hire tax credits? Contact us at Quentelle to learn about our platform. Click here to learn how you can schedule a demo.

 

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