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Title:

Employer Tax Credit Programs

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The Work Opportunity Tax Credit (WOTC) can add potentially thousands to an employer's bottom line. These credits are a good fit for employers who offer entry-level jobs and have frequent turnover or do a lot of hiring. Through HKP, employers can collect these credits easily because HKP researches, applies for and recoups these credits on behalf of the employer making the process simple and effective. – PowerPoint PPT presentation

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Title: Employer Tax Credit Programs


1
Tax Credits
  • Employer Tax Credit Programs


2
Agenda
  • Introduction of HKP and our services
  • Explain available federal and state employment
    tax credit programs
  • Requirements to receive various credits
  • HKPs streamlined administration of the process
    and online application platform
  • Recap and QA session

3
HK Family of Companies
4
About the HK Family of Companies
  • HKP is an affiliate of Honkamp Krueger Co.,
    P.C. (HK).
  • HK was established in 1947 and is a Top 100 CPA
    and business consulting firm in the U.S. and has
    been recognized for its national and regional
    growth for six consecutive years by Accounting
    Today (2016).
  • Ranked as the 65th largest CPA firm in the U.S.
    out of 53,516

5
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6
Experience Knowledge
  • Processing tax credits since 2003
  • Recouped over 84 million in tax credits for
    clients over the last five years
  • Over 1,600 tax credit client locations in all 50
    states
  • Direct contacts with states
  • Influential lobbying for WOTC

7
Federal Tax Credit Program
  • Congress has authorized billions in incentives to
    get employees back to work and to improve the
    economy.
  • Many of these incentives go unclaimed because
    businesses dont know about the credits or do not
    have the tools or time to maximize these
    benefits.

8
Work Opportunity Tax Program (WOTC)
  • WOTC is a federal tax credit available to
    employers for hiring individuals from specific
    target groups who have consistently faced
    significant barriers to employment.
  • WOTC joins other workforce programs that
    incentivize workplace diversity and facilitate
    access to good jobs for American workers.
  • Source Department of Labor Employment
    Training Administration

9
WOTC Program
  • Qualified new hires from identified target groups
    are worth up to 2,400 in federal tax credits.
  • Some qualified employees are worth as much as
    9,600 in credits.

10
Tax Benefits
  • Credit not a deduction
  • Credits can be carried back 1 year and carried
    forward 20 years

20 YEARS
1 YEAR
11
WOTC Target Groups
  • The Work Opportunity Tax Credit (WOTC) is a
    federal tax credit that reduces the federal tax
    liability of private employers who hire from
    qualified employees within targeted groups.
  • Targeted Groups
  • Temporary Assistance to Needy Families recipients
    (TANF)
  • Veterans/disabled veterans (Currently six
    different vet groups)
  • Ex-felons
  • Designated Community Residents (DCR) residing in
    an Empowerment Zone (EZ), Enterprise Community
    (EC), Renewal Community (RC) or Rural Renewal
    County (RRC)  
  • Vocational rehabilitation agency referrals  
  • Summer Youth
  • Food stamp recipients (SNAP)
  • Supplemental Security Income recipients (SSI)
  • Long-Term Family Assistance Recipients (LTFAR)
  • Long-term unemployment

12
Long-Term Unemployment Recipient
  • New target group approved Jan. 1, 2016
  • Requirements for employee
  • Unemployed 27 consecutive weeks or more
  • Includes a period in which the individual was
    receiving unemployment
  • Credit
  • 40 of employees 1st year of wages up to 6,000
    (2,400 credit)

13
  • Is WOTC a good fit for your organization?
  • Do you offer entry level jobs or pay around
    12/hour or less?
  • Do you have high employee turnover?
  • Do you have the internal resources to meet the
    28-day deadline for the WOTC credit?

14
Why HKP for Tax Credits?
  • We work with all industries.
  • Some of the most popular are
  • Casinos
  • Call centers
  • Convenience stores
  • Distribution centers
  • Franchises
  • Health care
  • Hospitality
  • Manufacturing
  • Restaurants/fast food chains
  • Retail
  • Staffing

15
How to calculate the WOTC
  • Credit calculates using

Hours of qualified wages
0 119 0
120 399 25
400 40
16
How to estimate WOTC example
  • 100 employee company with 100 turnover
  • 15 of employees typically qualify for credits
  • 1,000 conservative tax credit amount
  • 100 X 15 15 employees that may qualify for
    tax credits
  • 15 x 1,000 15,000

17
Application Process
  • IRS Form 8850
  • This form must be used for the WOTC program. Both
    pages must be completed.

18
Application Process
  • Individual Characteristic Form (ETA-9061)

  • This form must be used for the WOTC program. Both
    pages must be completed.

19
Application Process
  • Long Term Unemployment Recipient Self
    Attestation Form 9175

  • This form must be used to apply for Long Term
    Unemployment Target Group.

20
Online WOTC forms
  • HKP offers an online forms solution for the WOTC
    program.
  • This paperless process saves additional time and
    money.
  • Employers also have access to
  • Reports
  • Invoices
  • Employee forms
  • No additional cost for administering the program
    online.
  • Bilingual option for English and Spanish.

21
Feedback from our clients
Straight forward and easy to use. Staffing
client in Utah
  • A huge timesaver because we only have to worry
    about forms that qualify.
  • Staffing client in North Carolina

Great way to get paper out of the
stores. Franchise client in Iowa
Greener alternative. Staffing client in
Washington
Very well thought out and easy to
use. Pharmaceutical client in Missouri
22
WOTC Process
  • Every new hire completes the three forms 8850,
    9061 and 9175.
  • All forms are mailed to HKP on a weekly basis or
    submitted online to comply with the required
    28-day processing period.
  • All forms are tracked and reviewed to determine
    qualified employees.
  • All qualified forms are submitted to their
    respective state to obtain an approved
    certificate.
  • HKP sends a monthly compliance report sharing the
    results of forms received.
  • Certificates come back to HKP with confirmation
    of approval or denial.
  • Hours and wages for qualified employees are
    collected quarterly.
  • HKP processes credits quarterly and delivers a
    credit summary detailing credits for each
    certified employee.

23
Claiming WOTC
24
Whats new in WOTC?
Alabama Alaska Arizona Arkansas California Colorad
o Florida Georgia Illinois Indiana Iowa Kansas Ken
tucky Louisiana Maryland Massachusetts Michigan Mi
nnesota Mississippi
Missouri Nebraska New Jersey New Mexico North
Carolina North Dakota Ohio Oklahoma Oregon Pennsy
lvania South Carolina Tennessee Texas
Utah Virginia Washington Washington, D.C West
Virginia
  • States develop their own systems for electronic
    submission
  • 37 states accepting electronic submission of WOTC
    forms
  • Approval process significantly faster (60 days
    vs. 12 months)
  • Reduced mail expenses
  • Valid electronic signatures

25
Empowerment Zone Credits
  • Stimulates economic development in distressed
    areas
  • Similar to the DCR target group within WOTC
  • Employee must live and work within the designated
    federal zone
  • Up to 3,000 per employee available per year

26
Urban Empowerment Zones
  • Pulaski County, AR
  • Tucson, AZ
  • Fresno, CA
  • Los Angeles, CA
  • Santa Ana, CA
  • New Haven, CT
  • Jacksonville, FL
  • Miami/Dade County, FL
  • Chicago, IL
  • Gary/Hammond/E Chicago, IN
  • Boston, MA
  • Baltimore, MD
  • Detroit, MI
  • Minneapolis, MN
  • St. Louis, MO/East St. Louis, IL
  • Cumberland County, NJ
  • New York, NY
  • Syracuse, NY
  • Younkers, NY
  • Cincinnati, OH
  • Cleveland, OH
  • Columbus, OH
  • Oklahoma City, OK
  • Philadelphia, PA/Camden, NJ
  • Columbia/Sumter, SC
  • Knoxville, TN
  • El Paso, TX
  • San Antonio, TX
  • Norfolk/Portsmouth, VA
  • Huntington, WV/Ironton, OH

27
Rural Empowerment Zones
CA - Desert Communities (East of LA) GA
- Southwest Georgia United (SW GA) IL
- Southernmost Illinois Delta (Southern
IL) KY - Kentucky Highlands (Central South
Central KY) ME - Aroostook County (NE
Maine) MS - Mid-Delta EZ Alliance (West Central
MS) ND - Griggs-Steele (Eastern ND) SD - Oglala
Sioux Tribe (SW SD) TX - FUTURO (Southern
TX) TX - Rio Grande Valley (Southern TX)
28
State Tax Credits
  • Some states have tax credits parallel to WOTC.
  • State credits are frequently based on a business
    relocation, expansion or starting a business
    within a designated zone.
  • Often need to apply for credits before a project
    begins. It is crucial to be proactive.

29
Recap
  • WOTC was created for many industries and has a
    proven history of success.
  • HKP has highly regarded customer service with
    accurate and timely reporting.
  • Our streamlined platform is very simple to
    administer on our clients end.
  • HKP can offer many additional services and truly
    take a lot off your plate.

30
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31
Contact Information
  • taxcredits_at_hkpayroll.com
  • (888) 556-0123
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