One of the best ways to reduce your tax liability are tax credits. Programs like the Work Opportunity Tax Credit (WOTC) can earn your company up to $9,600 for each qualified employee. The tax savings are significant and ultimately makes your company more profitable.
The WOTC program was designed to help create new jobs and help individuals from certain target groups gain employment. As an employer, you may already be hiring some of these individuals. Are you capturing these tax credits or leaving them on the table?
Many people are not aware that family members of your employees may qualify your company for these tax credits. Although your employee is not the primary individual to qualify, they may have a family member within their household that belongs to one of the target groups.
Depending on your corporate structure these tax credits may also pass through to the owner’s personal income tax. The tax credits can also be carried forward for up to 20 years.
Now is the time to start tax planning for 2015.Many of the State Agencies are understaffed and we often see a delay with receiving the Certifications for qualified employees. Some States take over a year to verify eligibility. It will take several months before you start seeing the results from this program.
The WOTC guidelines also requires the application for each new hire to be submitted within 28 days of the hire date. You don’t want to wait until the end of the year to start the program, because you won’t receive the full benefits of tax credits for 2015.
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