Do you plan to hire new employees before the New Year? You may want to consider hiring a veteran. Not only will you help our servicemen and women find employment, but your business may be eligible for the Federal Work Opportunity Tax Credit (WOTC). WOTC—a tax credit available to employers for hiring individuals who have consistently faced significant barriers to employment—is worth thousands of dollars per eligible new hire.
Below are few helpful tips to consider:
- Hiring Deadline. Employers hiring qualified veterans before Jan. 1, 2014, may be able to claim the Work Opportunity Tax Credit.
- Maximum Credit. The tax credit limit is $9,600 per worker for employers that operate a taxable business. The limit for tax-exempt employers is $6,240 per worker.
- Credit Factors. The credit amount depends on a number of factors. They include the length of time a veteran was unemployed, the number of hours worked, and the amount of the wages paid during the first year of employment.
- Disabled Veterans. Employers hiring veterans with service-related disabilities may be eligible for the maximum tax credit.
- State Certification. Employers must file IRS Form 8850, Pre-Screening Notice and Certification Request for the Work Opportunity Credit, with their State Workforce Agency. They must file the form within 28 days after the qualified veteran starts work. For more information, visit the U.S. Department of Labor’s WOTC website.
- E-file. Some states accept Form 8850 electronically. For more about this topic, visit the IRS.gov site and enter “WOTC” in the search box.
For more information on the Work Opportunity Tax Credit and what your business must do by December 31, 2013, please contact Ryan Stemen, from Skoda Minotti’s State and Local Tax Group at firstname.lastname@example.org or at 440-449-6800.
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