Does Your Business Qualify for the Work Opportunity Tax Credit (WOTC)?

The Work Opportunity Tax Credit (WOTC) is a federal tax credit available to businesses that hire individuals from certain target groups who have faced significant barriers to employment. Businesses have the possibility to receive a credit between $375 and $9,600, depending on eligibility.

The WOTC aims to encourage diversity in the workplace and enhance job prospects for American workers.

But are you, as an employer, eligible for this credit? 

Let's find out. MegaPay has joined forces with Swift Tax Credits to counsel you on the process. If your business is eligible, Swift Tax will take care of the entire process for you. From paperwork to maximizing your credits, the professional team at Swift Tax will make sure you take full advantage of the WOTC opportunity. 

Who is Eligible?  

To qualify for the WOTC, your staff must comprise of specific employees that include: 

• Qualified short-term and long-term IV-A recipients (Temporary Assistance for
  Needy Families)
• Qualified veterans
• Ex-felons
• Designated community residents (DCR)
• Vocational rehabilitation referrals
• Summer youth employees
• Supplemental Nutrition Assistance Program (SNAP) recipients
• Supplemental Security Income (SSI) recipients
• Qualified long-term unemployment recipients

The WOTC also has ineligibility guidelines. These include: 

• Relatives or dependents of the business owner 
• The company's majority owners 
• Formerly employed persons, now rehired (does not include summer youth) 

Potential Value of the WOTC

A WOTC credit equal to 40% of the first $6,000 in qualified first-year wages, for a maximum credit of $2,400. Qualified individuals must complete at least 120 hours of work to qualify for the partial WOTC credit of $1,500, and over 400 hours for the full $2,400 credit. 

Additional criteria may also apply, like:

• How much said worker earned during the first year of employment 
• How many hours the employee worked 
• The demographic they fall under is a rural renewal county or empowerment zone

A taxable business can apply the credit against income tax liability. Employers can also roll over the current year's unused WOTC back a year and then forward it up to 20. 

New York Youth Jobs Program Tax Credit

In addition to the WOTC, some states have credits you can take advantage of based on different criteria. For example, the New York Youth Jobs Program is a tax credit program that provides employers with a refundable tax credit for hiring eligible, at-risk youth ages 16 to 24. The credit amount can be up to $7,500 per eligible employee and can be claimed for up to two consecutive six-month periods.

To be eligible, both the employer and the employee must meet certain qualifications. The employer must be certified by the New York State Department of Labor to participate in the program and must hire qualified employees between January 1 and December 31 of the program year, and the employee must be between the ages of 16 and 24 when they start work.

There are different credit amounts depending on whether the employee is hired for a full-time or part-time position, with higher credits being offered for full-time employment. Additionally, the program requires employers to submit an annual final certificate of tax credit issued by the New York State Department of Labor with their Form CT-635 or IT-635 to claim the credit.

Swift Tax can assist businesses in navigating the requirements and maximizing their tax credits. With our expertise, we can help you identify eligible employees and complete the necessary forms to claim your credits effectively.

By taking advantage of programs employers not only benefit financially but also contribute to addressing youth unemployment and promoting access to quality job opportunities for at-risk youth. Let Swift Tax guide you through the process and optimize your tax benefits while making a positive impact on your community.

Applying  with Swift Tax Credits 

If you are interested in taking advantage of the WOTC or New York Youth Jobs Program, click here to fill out this form and a team member from Swift Tax Credits will reach out.

The WOTC is not the only incentive program you as an employer can take advantage of. However, navigating these opportunities requires a solid grasp of tax law and programs.

Swift Tax Credits consists of accountants skilled in payroll. They use their know-how to expedite complex processes, making sure clients always get the full amount they deserve.