After a hiatus for nearly all of 2015, the Work Opportunity Tax Credit (WOTC) has been extended for five years from January 1, 2015 through December 31, 2019
This extension was driven by the passage of the Omnibus Spending Bill which includes the PATH Act (Protecting Americans from Tax Hikes Act of 2015). This Act extends certain expired (December 31, 2014) business tax provisions, including the Indian Employment Credit (IEC) and Empowerment Zones (EZ), for two years, and adds a new category to WOTC – long term unemployed.
The new long term unemployed target group is defined as individuals who begin work after December 31, 2015 and are unemployed for not less than 27 consecutive weeks and received unemployment compensation for a period of time under State or Federal law. The effective date for this new category is January 1, 2016.
Long-term unemployed – we are ready to screen
To ensure that we capture this new category, we have added questions to our screening technology.
2015 Transition Relief
Great news! Employers can now go back and screen anyone hired on or after January 1st, 2015 through on or before May 31st, 2016. Both current and former employees are eligible, even if they haven’t started working yet. This is a very unique opportunity: employers have access to thousands of dollars that are just waiting to be claimed.
What does this mean for me?
You can screen any employee you hired in 2015. This could mean thousands of dollars in additional credits!
What is the deadline for screening for these credits?
May 31st 2016. It is very important that you screen all of your employees immediately, so that we can process the applications with the State Workforce Agency (SWA).
What do I do now?
Start screening! Either invite them through your Jobseeker tab in our system or send them an email with your unique survey link. It is important that you follow through with every employee. If that means calling them or giving them an incentive ($5 gift cards usually do the trick), then do it! There may be thousands of dollars just sitting there for you to claim.
Is it complicated?
No, the few hours of work that go into this process are well worth the thousands of dollars you might receive.
Who do I screen?
You need to be screening every job applicant. In fact, you need to screen every candidate you’re remotely interested in. The earlier you know in the hiring process, the more credits you can receive.
What are you waiting for?
With the reinstatement of these credits, you need to start filing for credits immediately. This opportunity allows you to get credits for employees that already work for you—this is “found” money!
Further Explanation on 2015 Hiatus and Renewal
With the Work Opportunity Tax Credit (WOTC) program on hiatus for almost the entirety of 2015, many employers neglected to submit applications for this valuable program. While it makes sense that business owners were reluctant to spend time on something that wasn’t guaranteed, WOTC has always been renewed after a hiatus. And this year was no different!
How was this made possible?
President Obama signed the Protecting Americans from Tax Hikes Act of 2015, which guarantees WOTC funding for 2015-2019—Veterans, SSI recipients, Empowerment Zone residents, SNAP and TANF recipients, etc. Further, a new target group has been authorized: long-term unemployment. Qualified hires have been unemployed for twenty-seven consecutive weeks and have received unemployment payment during this time. Close to 30% of the U.S. population falls into one of these target groups that qualify businesses for $2,400 to $9,600 in tax credits per employee. With these numbers, the success of many businesses relies on these programs.