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Introduction

The Work Opportunity Tax Credit (WOTC) Program offers employers the opportunity for substantial savings. The maximum tax savings to your organization may be as much as a $9,600 credit for any new employee who qualifies as a member of a targeted group.
In response to the broad-based and diverse requirements of WOTC, many foresighted organizations are seeking the assistance of a consulting firm to administer these programs. Advantage Tax Consultants, Inc. (ATC) implements an efficient and workable program aimed at maximizing the tax savings that an organization can obtain through participation in this program.

About the WOTC Program

The Work Opportunity Tax Credit Program was initiated by Congress in 1996 in response to high rates of unemployment in certain communities. A high rate has persisted among certain groups of individuals: Youth, Veterans, Welfare and Food Stamp recipients, those receiving Unemployment, the physically disabled, and Ex-Offenders. WOTC was designed to help remedy this situation by giving employers an incentive through a tax credit to employ members of certain targeted groups. This credit can offer a substantial tax benefit to your organization.

It is a two-tiered tax credit based on the hours worked by qualified employees:

A.

If the employee completes at least 120 hours but fewer than 400 hours, the tax credit will be 25% of first year wages up to $6,000.

B.

If the employee completes
at least 400 hours,
the credit will be 40%
of first year wages up to $6,000.

   (A maximum tax credit of $2,400 on each qualified new hire.)

The WOTC program differs from other government programs, in that it directly rewards employers and does so without any strings attached. A qualifying individual may be employed for a period as brief as 120 hours, yet the employer still receives a tax credit on all wages paid.
The tax credit can be taken on any employee hired from any one of eight targeted groups. Currently, the eight groups are:
  • Qualifying Veterans.
  • Welfare Recipients.
  • Food Stamp Recipients
  • Individuals Unemployed for 6 months
  • Qualifying Youths ages 18-39.
  • Vocational Rehabilitation Referral/SSI Recipients
  • Qualifying Ex-offenders.
  • Qualifying Summer Youth Employees ages 16-17.

Long-Term AFDC/TANF Recipients

A generous two-year WOTC tax credit is available for employers who hire long-term family assistance recipients. Employers can earn a maximum tax credit of $9,000 over a two-year period on each individual certified under this program.
This group provides a 40% tax credit on qualifying first year wages and 50% credit on qualifying second year wages based on maximum qualifying wages of $10,000 annually.

First Year

   $10,000 x 40% = $4,000

Second Year

$10,000 x 50% = $5,000

Maximum potential tax credit = $9,000

Tax Credit for Veterans

An even greater Tax Saving incentive exists for hiring certain Veterans

Our goal is to help people in the best way possible. this is a basic principle in every case and cause for success. contact us today for a free consultation. 

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