WOTC stands for Work Opportunity Tax Credit. According to the U.S. Department of Labor, WOTC “is a Federal tax credit available to employers for hiring individuals from certain target groups who have consistently faced significant barriers to employment” and “joins other workforce programs the incentivize workforce diversity and facilitate access to good jobs for American workers.” Work Opportunity Tax Credit screening and processing, we would like to offer you some tips to make sure you get the maximum tax credit available in 2021. On average the United States spends $5 Billion each year on this program. This credit can vary from 25% to 40% of the employees first year’s salary depending on how many hours worked.
- Make sure to include the WOTC forms (8850 and 9061) as part of your on boarding process to make it easy for new hires. Give the new hires the “paperwork” along with their W-4 and I-9 and any other documents you use during on boarding or preloading.
- Give WOTC Forms to ALL new employees, not just employees you “think” may qualify, to avoid any potential discrimination issues.
- Explain what “WOTC” is if the new hires ask questions. Most new hires will not be familiar with the program at all. Remember it’s voluntary on behalf of the employee, so ask politely for their participation, and let them know why they are given the forms.
- Using Paper Forms? Use this checklist to make sure forms are completed correctly:
- Did your employee sign and date the WOTC forms correctly?
- Is the paperwork legible?
- Is the required information complete?
- Did you put in their start date?
- Did you put in their job title and hourly wage?
- Has the employee worked for your company before
- Is the paperwork complete within 28 days of the employee’s start date?
- Submit your WOTC paperwork on time! You can do this online with Ob4u or in the mail within 28 days of the employee’s start date to the State Workforce Agency. Ob4u helps keep you in compliance with this rule with our online portal and reports.
- Cut down on language barriers, and get more tax credits, by using translation tools which we offer through our online form or call center. Our online form can translate over 100 languages. The more likely the applicant understands the question, the higher the response rate will be.
- Hiring Veteran This will save time if the State Workforce Agency needs to request a copy from you.
- Track progress using Ob4u’s online portal, where you can see, in real-time, that your new hires are completing their forms so you don’t miss anyone. Again, WOTC is voluntary, but all employees should be encouraged to participate.
- Use a WOTC Administration service like Ob4u. We screen all your new hires to find you tax credits. On average 10-15% of your new hires may qualify which can lead to significant savings.
- Track Hours and Wages. Track the employee’s hours and wages in your payroll program, or on a spreadsheet. The actual value of your credits is based on this information. Employees must work a minimum of 120 hours to be eligible.
- Cut down on paperwork and save time Ob4u offers several easy ways to submit your WOTC forms:
- Secure online application (with translation).
- Secure Fax.
