What is WOTC?

How WOTC works

How WOTC Reduces Taxes

As a business owner, hiring employees (good employees) is your number one priority, but what if those employees you are hiring could also supply you with tax credits? WOTC stands for Work Opportunity Tax Credit and is a program offered by the IRS and U.S. Department of Labor, Employment and Training Administration.

This is a federal income tax credit incentive provided when you hire from certain target groups of job seekers who face employment barriers. Depending on why a new employee qualifies, the tax-credit offered ranges between $2,400 and $9,600 for each qualifying hire. As a rule of thumb, 10% to 20% of a typical workforce would qualify.

The targeted groups included:

  • Qualified IV-A Recipient
  • Qualified Veteran
  • Ex-Felon
  • Designated Community Resident (DCR)
  • Vocational Rehabilitation Referral
  • Summer Youth Employee
  • Supplemental Security Income (SSI) Recipient
  • Long-Term Family Assistance Recipient
  • Qualified Long-Term Unemployment Recipient

An employer must obtain certification that an individual is a member of the targeted group, before the employer may claim the credit. An eligible employer 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.

This is where HR Ledger can help! If your business regularly hires new people, you probably already hire WOTC-eligible employees. That means you are eligible for these tax reductions and you should be claiming them. The process is simple! HR Ledger partners with you to ensure your candidates and hires are screened 100% of the time by completing the WOTC questionnaire.

HR Ledger automatically determines eligibility for each candidate eliminating paperwork for ineligible candidates and generating the appropriate logic based questions for eligible candidates.

You supply the wages and hours – HR LEdger does the rest. Use the reports generator to track all submissions and eligible employees from start to finish. Upload hours and earnings through the interactive reports module. At the end of your year HR Ledger will generate credit reports that you can use to use to file your taxes.

HR Ledger can help.

HR Ledger automatically determines eligibility for each candidate eliminating paperwork for ineligible candidates and generating the appropriate logic based questions for eligible candidates.

Please call Malcolm or Scott today at 800-451-1136.

Written by:

Scott Evers

Scott Evers

Vice President Sales and Marketing