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
Lynnwhitesellheadshot

The Five Behaviors Of A Cohesive Team

Lynn Whitesell - Harris Whitesell Consulting
Jasonpathfinder3

What Is A Financial Plan?

Jason Wheeler - Pathfinder Wealth Consulting
Sherrip2019 insights profile

That’s Who We Are

Sherri Pridgen - Cape Fear REALTORS®

Trending News

Downtown Office Building Changes Hands In $3.7M Deal

Cece Nunn - Nov 18, 2019

Bankruptcy Filing: Vertex Railcar Owes More Than $45M

Cece Nunn - Nov 19, 2019

2019 Health Care Heroes Award Winners Announced

Staff Reports - Nov 18, 2019

Beach & Barn Raises $230K

Johanna Cano - Nov 19, 2019

County Votes Against Additional Funding For Wave Transit

Christina Haley O'Neal - Nov 18, 2019

In The Current Issue

Digital Human Helps Hearts

Hanna is the work of Marie Johnson, managing director at Centre for Digital Business in Australia, Chris Hillier, New Hanover Regional Medic...


Sport Attracts Players To Leland

When you want to socialize and engage in a multi-generational activity, Leland has a place to go: the House of Pickleball....


Habitat Chief Leads The Way Home

Steve Spain has spent much of his professional life combating homelessness. Heading into his seventh year as executive director of Cape Fear...

Book On Business

The 2019 WilmingtonBiz: Book on Business is an annual publication showcasing the Wilmington region as a center of business.

Order Your Copy Today!


Galleries

Videos

August 26, 2019 Power Breakfast: A Healthy Sale?
WILMA's Leadership Accelerator
2019 WilmingtonBiz Expo Keynote Lunch - CEO, nCino, Pierre Naude`