Since the inception of the WOTC program in the late nineties, lawmakers have remolded the framework and refocused objectives to encompass a greater target audience but because the program as a whole is still underutilized, several misconceptions remain.
The program as a whole has dual, complementary objectives. By enabling individuals dependent on government assistance to find gainful employment, it will subsequently reduce the financial burden on the U.S. economy.
Program success is demonstrated by the over 6 million success stories where jobs are secured by those previously on Temporary Assistance for Needy Families (TANF), Supplemental Nutrition Assistance Program (SNAP - or food stamps), Supplemental Security Income (SSI), or other programs.
Because the program has, indeed, been successful, lawmakers have frequently changed the framework to allow the arm of WOTC to reach more than the originally indicated target groups. Years ago, WOTC was referred to commonly as the "welfare and felon credit."
Although applicable at the time, employers may now also receive a federal credit for hiring a variety of Veterans, disadvantaged youth or someone living in an economically depressed area of the country. By only looking at WOTC as the welfare and felon credit, you could prevent yourself from realizing greater benefits. Likewise, using any version of the appropriate screening forms other than the most recent available will prevent the recognition of your eligible employees.
WOTC is a point-of-hire incentive, meaning that applicants must be screened for eligibility prior to employment. Therefore, you unfortunately cannot screen your current workforce. Nor can you dismiss your staff, rehire them and then screen - which is a common question to sales agents and another misunderstanding of the program. At that point, they are considered prior hires, which are disqualified.
If you've previously dismissed participating in this incentive because you don't believe you hire ex-offenders or food stamp recipients, you may be missing out on substantial federal tax benefits.
Make sure you are taking full advantage of the WOTC program, and in some states, the piggy-back credits that allow additional rewards.
To maximize the degree of your savings, speak with a WOTC consultant about your incentive involvement today.
For a complete and detailed listing of each federally recognized target group, visit our website at www.taxcreditco.com.