Work Opportunity Tax Credit

Work Opportunity Tax Credit - Stratlign Accounting

Work Opportunity Tax Credit

Work Opportunity Tax Credit Summary:

  • The Work Opportunity Tax Credit (WOTC) is a Federal tax credit available to employers for hiring individuals from certain target groups, including those receiving long term unemployment benefits and who have consistently faced significant barriers to employment.
  • Tax credits can range from $2,400 – $9,600. The exact amount depends on the employee’s specific target group and the hours they worked during the year.
  • With the pandemic forcing many to be on unemployment for 27 or more consecutive weeks this gives many employers the opportunity to get this credit!

How the Work Opportunity Tax Credit works:

  • Before you can claim the credit, employers must submit a completed Form 8850 to the State Workforce Agency within 28 days of employees’ start date. This is in order to certify that an individual is a member of the targeted group.
  • It takes about 8-10 months on average to hear back.
  • After the required certification is secured, taxable employers claim the tax credit as a general business credit on Form 3800 against their income tax.

Limitations on the Tax Credit:

  • 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.

What makes employees eligible for the Work Opportunity Tax Credit?:

  • Employee must be apart of the targeted groups listed below.
  • Employee must work at least 120 hours in their first year of employment.  (And the more hours they work, the higher the tax credit will be.)

Who is included in the WOTC targeted groups?:

  1. Qualified IV-A recipient
  2. Qualified Veteran
  3. Qualified Ex-Felon
  4. Designated Community Resident
  5. Vocational Rehabilitation Referral
  6. Summer Youth Employee
  7. Supplemental Nutrition Assistance Program (SNAP “food stamps”) recipient;
  8. Supplemental Security Income (SSI) recipient;
  9. Long-term Family Assistance recipient; and
  10. Qualified Long-term Unemployment recipient.

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Melanie Jerome, MBA

SENIOR STAFF ACCOUNTANT, FLORIDA

Meet Melanie J, one of our senior staff accountants! Melanie ensures your financial health with precision and expertise. Beyond the office, she’s a true crime enthusiast who loves traveling and outdoor adventures. Whether she’s balancing books or exploring new trails, MJ’s dedication and skill set the standard for excellence in our team.

Seren Lunsford, MBA

STAFF ACCOUNTANT, INDIANA, QUICKBOOKS ONLINE PRO-ADVISOR

Meet Seren, one of our dedicated staff accountants here at level accounting! She is responsible for bookkeeping & payroll. Outside of the office, you can find her on the sidelines of a soccer pitch, karting track, or baseball diamond, cheering on her two active boys. Seren is also a proud owner of two gentle giants, her beloved Great Danes. In her downtime, she channels her creativity into baking and decorating sugar cookies, always eager to experiment with new baked goods ideas and recipes. With her expertise in accounting and her passion for family, pets, and baking, Seren brings a unique blend of professionalism and warmth to our team.

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EXECUTIVE ASSISTANT, FLORIDA

Ivette Rivera is our Executive Assistant at Level Accounting, juggling schedules and keeping things running smooth.

When she’s not crushing it at work, Ivette is an avid participant in her church community. As a mom, she’s all about those quality moments, whether it’s baking up a storm, hitting the water for some kayaking fun, or just chilling with a good book or binge-worthy show. And let’s not forget her partners in crime at home: Harley Quinn, the fridge-raiding pit bull, and Atlas, the cat who rules the roost. Ivette’s all about that balance between work hustle and personal bliss.