Follow Chad Linkedin
Email Chad Email
Financial
Jan 25, 2017

Tax Credit For Hiring Targeted Employees

Sponsored Content provided by Chad Wouters - Partner, Earney & Company, LLP

At the end of 2015, the U.S. House and Senate passed the Protecting Americans from Tax Hikes Act of 2015 (PATH). The PATH retroactively reauthorizes the Work Opportunity Tax Credit (WOTC) program for a five-year period, from Dec. 31, 2014 to Dec. 31, 2019.

WOTC is a federal tax credit available to employers for hiring individuals from certain target groups, who have consistently faced significant barriers to employment. WOTC joins other workforce programs that incentivize workplace diversity and facilitate access to good jobs for American workers.

Target groups for WOTC include:

  • Unemployed veterans
  • Temporary Assistance for Needy Families recipients
  • Food stamp recipients
  • Designated Community residents
  • Vocational Rehabilitation-referred individuals
  • Ex-felons
  • Supplemental Security Income recipients
  • Summer youth employees
  • Qualified Long-Term Unemployment tecipients
For employers to qualify for the credit they must:
  • File Form 8850 - Pre-Screening Notice and Certification Request for the Work Opportunity Credit - which is usually due no later than 28 days after an employee begins work.
  • Taxable employers must claim the tax credit, after the required certification is secured, as a general business credit on Form 3800 against their income tax by filing:
    1. Form 5884
    2. Form 3800
    3. You business’s related income tax returns
  • Tax-exempt employers must claim the credit against the employer social security tax by separately filing Form 5884-C after the required certification (Form 8850) is secured and after filing the related employment tax return for the period that the credit is claimed.
The credit is limited to the amount of the business income tax liability or social security tax owed. A taxable business may apply the credit against its business income tax liability, and the normal carry-back and carry-forward rules apply. For qualified tax-exempt organizations, the credit is limited to the amount of employer social security tax owed on wages paid to all employees for the period the credit is claimed.

If you are uncertain if you are an employer who qualifies for WOTC, feel free to contact one of our tax professionals at Earney & Company, L.L.P. at (910) 256-9995.

Chad Wouters, CPA joined Earney & Company in December 2006 and became the tax partner in November 2013.  With an emphasis on strategy and planning, Chad works with his clients all year to ensure the most efficient tax strategies are put into place.  Earney & Company, L.L.P.  is a CPA firm that handles tax compliance, consulting and planning as well as audit and other assurance services.  For more information please visit www.earneynet.com or call (910) 256-9995.  Chad can also be reached at [email protected].
 


 

Ecolarge
Ico insights

INSIGHTS

SPONSORS' CONTENT
Chris coudriet headshot 300x300 10211545555

Lessons Learned from a False Alarm

Chris Coudriet - New Hanover County Government
Nealjohnson 12191614553

Add Value to Your Home with a Fire Pit

Neal Johnson - Network Real Estate
Billhunter300x300 b&w

The Rise of Conversational Marketing

Bill Hunter - Wilmington Design Company

Trending News

NHRMC Buys Wilmington Property From International Paper

Cece Nunn - Aug 15, 2018

Untappd Leads Pack Of Local Firms On Inc. 5000 List

Christina Haley O'Neal - Aug 15, 2018

Wilmington Brewing Co. Plans Expansion

Christina Haley O'Neal - Aug 16, 2018

Trampoline Park To Open Saturday At Mayfaire

Johanna Cano - Aug 16, 2018

Law Firm Moves To Murchison Building

Johanna Cano - Aug 15, 2018

In The Current Issue

Woman Owned Businesses On The Rise

Women are starting and growing their businesses at a rapid pace in the state, including in a variety of sectors in the Wilmington area....


Tariffs Could Impact FTZ Business Benefits

Local and national trade experts say that Foreign Trade Zones can be a tool for local companies to utilize in global business, but whether i...


Apiture Launches Banking Features

Two new banking tools introduced by Wilmington-based Apiture are designed to help banks give customers a better handle on their spending....

Book On Business

The 2018 WilmingtonBiz: Book on Business is an annual publication showcasing the Wilmington region as a center of business.

Order Your Copy Today!


Galleries

Videos

2018 Power Breakfast - Dishing on the Restaurant Biz
2018 WilmingtonBiz Expo - Keynote Lunch with Eric Dinenberg, Rouse Properties
2017 Health Care Heroes