On January 3, 2013, the President signed into law the American Tax Payer Relief Act of 2012, which authorizes an extension of the Work Opportunity Tax Credit (WOTC) program. But, what exactly is WOTC? Can your business take advantage of this opportunity for tax credits?
WOTC was passed to help select groups of workers move from economic dependency into self-sufficiency. Participating employers are able to reduce their income tax liability by hiring individuals from select target groups. The maximum tax credit for businesses can range from $2,400 to $9,600 depending on the employee hired.
Eligible new hires include the following, but there are certain specifications surrounding each group. PEO Advantage recommends visiting the US Department of Labor’s website for additional information.
- Qualified Veterans
- Qualified Long-term Temporary Assistance for Needy Families (TANF) Recipient
- Qualified Short-term TANF Recipients
- Qualified SNAP (Food Stamp) Recipients
- Qualified Designated Community Residents
- Qualified Vocational Rehabilitation Referrals
- Qualified Ex-felons
- Qualified Supplemental Security Income (SSI) Recipients
- Qualified Summer Youth Employees
WOTC is designed to aid those who have consistently faced significant barriers to employment, and transform them into steady income-earning tax payers that contribute to an overall better economy. If your business is interested in hiring from any of these select target groups in 2013, contact your PEO. Your PEO will help attract the right employees, in addition to reducing turnover, sharing compliance expertise and streamlining the hiring process.
If your business does not yet work with a PEO, check out this article: 5 Signs That Your Company May Be Ready for a PEO.
Whether it’s a new PEO relationship or a new opportunity for tax credits, 2013 may be your year for significant savings! Contact PEO Advantage for additional information and support.