Before your company files its tax return, consider this: Your company may be able to claim tax credits for hiring certain employees. The Work Opportunity tax credit is a federal program that allows for-profit companies to claim $2,400 to $9,600 for each eligible new hire.
It’s worth spending an extra minute completing a simple form for each new hire, which could earn your company thousands of dollars in federal tax credits. The federal government wishes to see certain people gainfully employed, such as veterans, food stamps recipients, unemployed individuals, SSI recipients, or people that reside in Federally Designated Zone areas. Therefore, it is offering tax credits to companies that offer them employment. You don’t have to change your hiring process, because up to 40% of your new hires may qualify.
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Employers nationwide claim about $1 billion in WOTC tax credits each year under this program, but in the staffing industry, many are unaware that it even exists. A midsize company that hires 15-20 new hires a month, could result in approximately $100,000.00 in tax credits every year. And this is for hiring people it would hire anyway.
For those companies that have not yet participated in the WOTC Program, the IRS recently extended the deadline for submitting new hire applications. Companies can now submit for all qualified new hires from Jan. 1, 2015, through the present. The deadline for submitting those applications is Sept. 29, 2016.
Already filed your returns? No problem. According to the IRS, WOTC tax credits can be carried forward for 20 years.
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