Happy Holidays!

May you and yours be safe and well,

WOTC Solutions

President Signs WOTC Into Law

The latest from the WOTC Coalition President, Paul Suplizio.

"The President signed H.R. 5771, the Tax Increase Prevention Act, into law Friday, December 19. The bill extends current WOTC law, VOW To Hire Heroes Act veterans credits, Empowerment Zones, Indian Employment Tax Credit, and fifty other tax extenders retroactive to January 1, 2014.

The bill also enacts for the first time the ABLE Act authorizing tax-advantaged savings accounts for people with disabilities and their families."

We will continue to work diligently with the Coalition to see the law made permanent.

Happy Holidays!

Senate passes tax extenders

The Senate passed H.R. 5771 last night with a vote of 76-16. WOTC is retroactive to January 1, 2014 and applies to employees who commence work for the employer through December 31, 2014.

It is important to make sure that you have completed and submitted applications for any employees hired this year as soon as possible. The law is to be applied retroactively to 2014 so any applications that were received timely this year should be in the front of the line.

WOTC Solutions will do everything we can to expedite your 2014 applications! Contact us with any further questions regarding your applications.

House Votes to Renew "Tax Extenders"

The House voted overwhelmingly on Wednesday to renew more than 50 expired tax breaks, including the Work Opportunity Tax Credit, for individuals and businesses through the end of this year, with the Senate looking increasingly likely to follow suit.

Lawmakers have been under pressure to take action before the end of this year so that taxpayers can claim the breaks on their 2014 tax returns.

We are communicating with WOTC Offices across the nation to learn how best to help them expedite pending 2014 applications the moment the law is reinstated. 

WOTC Renewal Remains Our Priority

As Congress reconvenes tomorrow they walk in the door to over 50 expired tax provisions that could postpone the start of the tax season. The business community remains unsettled not knowing how to prepare for the end of the financial year. We were advised to wait until the election was complete to bring such issues to our Congresspeople and we have done just that. But, it's time to tell Congress what we need and what we expect.

"Our goal is to get WOTC enacted in the EXPIRE bill early-on in the lame duck session so as not to be drawn into talks on the budget and the rest. We have grounds to press this because a delay to December will undoubtedly impact and delay the IRS tax filing season. 

We have the White House supporting WOTC and other extenders in the EXPIRE bill. We have Senate Majority Leader Reid and Republican Leader McConnell as long-time supporters of the extenders who voted for the EXPIRE bill."

-Paul Suplizio, WOTC Coalition

WOTC Solutions, along with the WOTC Coalition is pressing upon members of Congress the urgency of passing the tax extenders. We continue to represent our peers and clients in order to be heard. If you would like to speak to your representative directly on this issue, please get in touch and we can point you in the right direction. 

Can I deduct preparation fees?

Many clients have asked recently about deducting WOTC preparation fees as a business expense. The answer is, "Yes!" So not only are you lowering your bottom line tax liability, the service fees for your WOTC Consultant are tax-deductible! We wanted to make sure that we had our facts straight as we educate our clients. According to the IRS, business expenses are defined as "the cost of carrying on business". These expenses are usually deductible if the business is operated to make a profit.

What Can I Deduct?
To be deductible, a business expense must be both ordinary and necessary. An ordinary expense is one that is common and accepted in your trade or business. A necessary expense is one that is helpful and appropriate for your trade or business. An expense does not have to be indispensable to be considered necessary.
It is important to separate business expenses from the following expenses:
The expenses used to figure the cost of goods sold, Capital Expenses, and Personal Expenses.

Please feel free to contact us with any questions about how to claim your WOTC credit(s) after a certification has been issued. April will be here, before you know it!

We recently got a question from a non-profit employer wanting to know if his new employee was WOTC-eligible. There is some fairly heavy language from the Department of Labor that answers this question, but we found a more direct and practical answer.

"Non-profits, charities, and other tax-exempt organizations are generally required to file Form 990 or Form 990-EZ with the Internal Revenue Service each year to maintain their tax-exempt status. Form 990 is an “information return” and is required to be filed under the provisions of Internal Revenue Code Section 6033.

So for those orgs, the IRS says (http://www.irs.gov/formspubs/article/0,,id=177948,00.html): “This law provides an expanded work opportunity tax credit to businesses that hire eligible unemployed veterans and for the first time also makes part of the credit available to tax-exempt organizations. Businesses claim the credit as part of the general business credit and tax-exempt organizations claim it against their payroll tax liability. The credit is available for eligible unemployed veterans who begin work on or after November 22, 2011, and before January 1, 2013. More information will be posted soon.”

Non-profits that engage in for-profit business enterprises may be subject to corporate income taxes on its unrelated business income. To be considered unrelated business income, the income must be generated by a business that is “regularly” carried on and that is “unrelated” to the exempt function of the non-profit. Unrelated business income is defined and explained in the Definitions section of the Instructions for Form 990-T.

For example, one of my non-profit clients provides job training and employment services to persons with disabilities. It generates business income to fund its mission through the manufacture of frames and battery terminal lugs and the services of custom framing, chair caning, and the sorting of commingled recyclables. So, as it has more than $1,000 in gross income from an unrelated business, it must file Form 990-T. Non-profits are that not otherwise required to file Form 990 (such as religious organizations) are required to file Form 990-T if they have unrelated business income.

On Form 990-T the WOTC is claimed on Part 4, Line 40c. The organization must also attach Form 3800 (General Business Credit), where, in Part III Line 4b you claim the total amount of credit as determined from the Forms 5884 (Work Opportunity Credit) you submitted to your SWA. The WOTC Employer Certification Forms you’ve received for each qualified hire are your proof that you have earned the credit."

Lower your hiring costs in 2014

We get a lot of questions in regards to how long the WOTC process takes. The benefits to eligible employers are unfortunately not immediate which is why it is important to get WOTC screening services in place so that you can use the credits in the future. Depending on your state office, Certification can take anywhere from 2 weeks to a year. Screening all your new employees for eligibility will determine and project estimated amounts you can save in 2014.

Having WOTC services in place at your business is a lot like opening a tax credit savings account. With every new hire that is WOTC eligible you have the potential to lower your federal tax liability. If you hire 100 new employees in 2014 and 20 are eligible, you have the potential to save $48,000.00. If you pay $12.00 an hour to new employees, you can save $3.60 per hour with WOTC credits. 

How does my business get started?
1. Call WOTC Solutions today.
2. Identify how to integrate WOTC screening into your current hiring process. 
3. Identify and screen all new employees hired within the past 28 days.

You might have heard that the law is not currently in place, however WOTC Offices in all 50 states are still accepting applications. The 28 day application deadline is still in place, so don't miss out on saving your business money in 2014. Make sure you are screening all of your new employees and meeting application deadlines.

What supporting information can help expedite my WOTC application?

WOTC offices across the country always appreciate assistance verifying eligibility in order to make determinations faster.* Completing your 8850 and 9061 in full isn’t always enough. For each target category there are several acceptable sources for verification purposes. By collecting this information for your WOTC applications you can often see faster determinations.

Below is a list of documentary evidence accepted by WOTC Offices:

TANF Recipient - AFDC benefit history, Case Number

Ex-Felon - Parole or Probation Officer Statement verifying release or conviction date, Online correctional institution records, Case Manger statement, Correctional Institution ID Number

Veteran Status - A copy of the applicant’s DD-214

Food Stamp Recipient - Name of primary recipient and city/state where SNAP benefits were received. Case Number/Identifier

SSI Recipient - a copy of the applicant’s Benefit Verification Letter, from the Social Security Administration.

These sources will not magically result in Certification overnight, but will definitely point your WOTC Coordinator’s Office in the right direction to expedite your applications.

*  In 2011 the Department of Labor reports that the national WOTC application workload was 3,750,967.

WOTC Bill enters the House

Republican Congressman Aaron Schock of Illinois and Democratic Congressman Charles Rangel of New York have again teamed up to introduce to extend WOTC.

H.R. 5264, titled, “A Bill To Extend The Work Opportunity Credit Permanently,” was introduced in the House on July 30^th and referred to Committee on Ways and Means.

Thanks to Congressman Schock and Rangel we now have a specific bill we can ask other members of the House to co-sponsor and support. 

New verification source for federal ex-felons

After working closely with the Department of Labor for the past year to craft a new verification policy for federal ex-felon applicants, WOTC Solutions is pleased to announce that all State WOTC Coordinator's offices can now use the online federal inmate locator to verify WOTC eligibility for federal ex-felons.

Until this change, WOTC applications for federal ex-felons have sat at the back of the processing line because there was no universal source to verify federal felony conviction and release dates. This has resulted in WOTC applications pending for years, preventing businesses from taking advantage of the $2,400.00 tax credit due to them.

We expect this new WOTC verification source to speed up the certification process for our clients and for all employers who see the value in the WOTC and use it to lower their tax liabilities.

We’re very happy to have been part of this solution and we thank you for your continued support!

Happy Independence Day!

Have a safe and happy holiday weekend.

GOP blocks tax extenders bill

The Senate has adjourned until Tuesday when it will go on to other business, but Majority Leader Harry Reid has left the door open to bringing the tax extenders back to the floor if agreement can be reached on amendments.

We will continue to lobby the Republican members of the House and Senate to repeat the message on behalf of our clients that the WOTC is a fraud free tax incentive that employers need and deserve as they continue to create jobs.

Senate Finance Committee Chairman Ron Wyden, D-Ore., issued the following statement regarding Thursday's floor action on the EXPIRE Act.

“Today the Senate voted to punish innovators, punish small businesses, punish homeowners who are underwater with their mortgages, punish returning veterans looking for jobs, and punish students already struggling to pay for college tuition.

Despite today’s actions, the EXPIRE Act continues to be critical and timely legislation that we have to get done. And as I have said before, I continue to be open to narrowly related amendments similar to those added in Committee that strengthen the bill.

In terms of next steps, I am pushing ahead today -- working with my colleagues on both sides of the aisle -- to find a path forward.”

WOTC moves forward

"Yesterday the U.S. Senate voted overwhelmingly (96 for, 3 against) to take up S 2260, the Senate’s Expiring Provisions Improvement Reform and Efficiency (EXPIRE) Act of 2014.

This procedural vote of cloture means that a final vote on the bill will be coming soon. In the mean time, amendments will be considered and negotiations concluded. We anticipate a vote on the floor of the Senate as early as this week.

The language of the tax extenders bill will renew the Work Opportunity Tax Credit (WOTC) and Empowerment Zone tax incentives (and numerous other programs) through 2015. It also includes an expansion of WOTC by adding a new target group — the Long-term Unemployment Recipient. "wotcplanet.com

The latest on the EXPIRE act that includes the Work Opportunity Tax Credit

"Senators as early as this week are expected to start working over the tax extenders package cleared by the Finance Committee in April. The so-called EXPIRE Act includes a two-year extension of the renewable energy production tax credit at a cost of $13.35 billion, as well as credits for cellulosic biofuels, biodiesel and renewable diesels, home energy efficiency upgrades, new energy efficient homes and commercial buildings, alternative fuel refueling property, electric motorcycles, and fuel cell motor vehicles. The bill comes shortly after the House approved a bill making permanent an R&D tax credit." www.politico.com

If you have any specific questions regarding the WOTC application back-log in your state, please don't hesitate to contact us. More to come on the law's status as we know it.

WOTC Coalition update

The Senate Finance Committee completed markup of the EXPIRE Act extending WOTC for two years through December 31st, 2015 and creating a new target group for workers who exhaust Federal or State unemployment benefits. During markup, a few amendments were adopted, only one of them touching WOTC—an important amendment by Senator Stabenow of Michigan extending Empowerment Zones for two years was passed.Amendments to allow WOTC for all long-term unemployed workers, and to increase the WOTC benefit for hiring veterans, were dropped at the markup.

The Senate will recess on April 10th for the Spring work period and won’t return until April 28th. EXPIRE is ready to move, but whether it comes up next week or after the recess is up to the Majority Leader. We will keep you informed.

Amendment proposed to add unemployed WOTC target group

U.S. Senator Rob Portman (R-Ohio), along with Senators Ben Cardin (D-Md.) and Mark Warner (D-Va.), offered an amendment to the Expiring Provisions Improvement Reform & Efficiency (EXPIRE) Act, also known as the tax extenders bill, which would make long-term unemployed Americans eligible for The Work Opportunity Tax Credit (WOTC). The WOTC provides an employer tax credit of between $1,200 and $9,600 per employee for hiring and retaining veterans, ex-felons, the disabled, summer youth employees, and Temporary Assistance for Needy Families, Supplemental Nutrition Assistance Program, and Supplemental Security Income recipients.

"Nearly 4 million Americans are struggling to find work in this weak economy," Portman stated. "We should make it a top priority to connect those Americans with a job, and to create good tax policy that encourages job creation and hiring."

Portman is the author of the bipartisan unemployment insurance agreement that would extend unemployment insurance for long-term unemployed Americans. Portman played a key role in ensuring the bill is fully paid for, that it is short-term, and that it includes reforms to the broken program that's failing to connect Americans with jobs.

READ MORE...

The latest news from the WOTC Coalition

Yesterday, Finance Committee Chairman Senator Ron Wyden said his committee would hold a markup of a tax extenders bill the week of March 31st, date to be announced. Senator Wyden told Committee members in a memo that he’s determined this would be the last temporary extension:

“I’m determined that this is the last time we do extenders and would like to leverage this last extension to reform the broken tax code.”

Thus the chairman of both tax-writing committees, Senator Wyden and Congressman Camp, are moving in the same direction, for an up or down vote on each extender to be included in a reformed tax code.

We will keep you informed on any further developments as we know them, and if you have immediate questions please contact us at info@wotcsolutions.com.

2014

Law Update

The WOTC law is once again in temporary hiatus as of January 1, 2014. WOTC Solutions continues to lobby on all of our clients’ behalf to stress the importance of timely renewal and the benefit this law provides to employers across the United States. All WOTC offices continue to process applications with a hiring date on or before December 31, 2013.

What we’re up to...

We are working diligently to achieve results on your behalf and get Certificate determinations ahead of tax liability due dates. Please take the time to go to our website and report hours worked and wages paid or get in touch with your WOTC representative by phone or email. If the employment status of any of your WOTC applicants has changed, please let us know. And don’t forget that all WOTC Certifications are valid for twenty years.

New Employees?

Don’t forget to screen all new employees in 2014 in a timely manner for eligibility. There are eight target categories of eligibility that can qualify your business for the WOTC and each employee can save your business up to $2,400.00. You have only 28 days to get your complete and correct applications to your state office and we strongly advise to continue to meet those deadlines.