Wednesday, August 21, 2013

Work Opportunity Tax Credtis

I have been evaluating the Work Opportunity Tax Credit, and I am concerned that a lot of companies that may be due this credit are not realizing the credit (the horror!).  The class of workers who qualify for this credit are numerous including: veterans, long-term unemployed, vocational rehab referrals, food stamp recipients, and even kids home from college (IN Empowerment ZONES).
Here is how you get the credits:
1) Hire someone from those entitled to the credit.

2) Complete the needed forms. The dates for completing the paperwork are pretty onerous and include the requirement that the forms are mailed in within 28 days of the employees start date.
-Mail in the following forms:
a) Complete IRS form 8850, which is filled out by both the soon-to-be employee and the employer.
b) Complete ETA form 9061

4) Mail the forms to your state agency. 
In Florida, mail forms to the following:
Gloria Harrison
Department of Economic Opportunity
WOTC Program
MSC G-300
TALLAHASSEE, FL 32399-4140
Phone: 850-921-3299

5) Try to make sure the soon-to-be employee works at least 120 hours and more preferably 400 hours.  400 hours is where the maximum credit is realized.

6) Once the employee is hired, make sure your tax prepare knows you have hired the eligible employee and have the prepared complete IRS form 5884 to get the credit.

We here at Nicholas J. Pennewell, CPA, LLC would enjoy the opportunity to talk to anyone who thinks they are entitled to this credit.