Tax Planning Strategies | Time is Running Out for the WOTC

Tweet

Although the Work Opportunity Tax Credit (WOTC) expired on January 1, 2012, for most candidates, employers can still receive a credit for hiring qualified veterans before January 1, 2013. Since the credit is scheduled to sunset in a few months, now is the time to act if you think you may be able to take advantage of it.
Both non-profits and for-profits are eligible to receive the WOTC, which is a credit against the employer’s share of the social security tax, but they have slightly different processes to follow to receive it.
Non-Profit Organizations must complete Form 8850, Pre-Screen Notice and Certification Request for the Work Opportunity Credit, and file it with the appropriate state workforce agency within 28 days of the new hire’s start date. Next, the organization will receive certification that their new hire is eligible for the credit. Once a non-profit receives this notification, they must file Form 5884-C, Work Opportunity Credit for Qualified Tax-Exempt Hiring Qualified Veterans, with their tax return.  
For-Profit Organizations must complete Form 8850, Pre-Screen Notice and Certification Request for the Work Opportunity Credit, and file it with the appropriate state workforce agency within 28 days of the new hire’s start date. Next, the organization will receive certification that their new hire is eligible for the credit. Once a for-profit receives this notification, they must claim the credit as a general business credit against their income tax.
To learn more read, Expanded Work Opportunity Tax Credit Available for Hiring Qualified Veterans