Employee eligibility

WOTC eligibility is a complicated and often tricky subject for busy business owners. Let's look at a few different hiring scenarios that we've come across at WOTC Solutions to shed some light on the subject.

#1
Bob's Carpet Store just hired a new employee, Bill, that is a WOTC qualified veteran. Bill is taking the job at Bob's part time because he has another part time job at  Jim's Car Wash. Which employer can claim the WOTC credit for hiring Bill?

The Answer: Both employers can apply for and eventually claim the WOTC. Eligibility is based upon the employee and not the employer. The credit is then claimed against federal income taxes based upon the amount of hours an eligible employee works and the gross wages they were paid.

#2
Jim owns his own landscaping business and was just awarded a contract to provide landscaping services to a local mall. He hired his brother, Paul, and his friend, Tom, as contract labor to assist with this large client. Are either Tom or Paul WOTC eligible employees?

The Answer: Neither Paul nor Tom is WOTC eligible. Employees must have taxes deducted from their earnings to qualify. Being contract labor disqualifies an employee. And, an employee related to the business owner is disqualified.

#3
 Martha's Bakery hired three employees on October 1 from a local halfway house that are all WOTC qualified ex-felons. Today is October 27. Can Martha apply for the WOTC based upon her new hires?

The Answer: Yes! However the deadline to apply is 28 days form the employees start date of October 1. All Martha's paperwork must be complete, correct and received by the State WOTC Office October 29.