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Call Us: (866) 484-9529

March 2015

2014 WOTC Tax Extension Reminder

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With tax deadlines looming, we thought it best to revisit the specifics of WOTC for 2014 and what implications that has on your corporate taxes.

A quick reminder that for 2014 you can file for WOTC tax credits by April 30, 2014. With this unique extension, states are backlogged and may require extra time to issue your credits.

For this reason many companies filed for an extension on their corporate taxes in order to easily allocate their 2014 WOTC credits once issued.

For the 2014 tax credits they must be applied in the following order.

  • 2014 Tax liability
  • 2013 Tax liability
  • Carry forward to the next year of liability (up to 20 years)

If you didn’t file an extension, you will still be able to file an amended return once your state has issued all tax credits for 2014.

You’ll want to make sure you discuss this with your tax preparer to make sure you properly claim your credits.

WOTC Extension Questions

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By this time most everyone knows that The IRS recently announced Notice 2015-13, which will provide some much needed relief for employers seeking WOTC credits from 2014.

As we’ve mentioned before, this is a nearly unprecedented move by the IRS. Since the inception of WOTC in 1996, this is only the second time such an extension has been made available. Again this is only for 2014, the WOTC program has waived its 28-day deadline to submit tax credit requests.

As we’ve had countless conversations with employers there are some consistent questions that have come up and we’d like to answer them here in case you might be curious.

When is the deadline for submitting last year’s forms?

April 30, 2015 is the deadline for submitting any new hires’ applications from 2014 only. All 2015 forms must be received within the regular timeframe of 28 days from new hires’ start dates.

Who is eligible?

All employees hired between January 1, 2014 and December 31,2014 are eligible to apply.

How often does this happen?

The rare extension has only occurred twice since WOTC was established in 1996. This is a great opportunity to recoup extra tax savings!

How far back can we go?

Any new hires made since January 1, 2014 are eligible.

When can I use the credits?

WOTC offsets federal income taxes and can be carried back to the prior year or carried forward 20 years.

There’s only one catch to this relief measure and that is the April 30, 2015 deadline. This means that ALL 2014 applications must be submitted by this date or they will not be processed.

To learn more about IRS Notice 2015-13 and how it applies to your business, email troyloney@taxcreditmgmtgroup.com now before time runs out.

SNAP: A Huge Part of WOTC Tax Credits

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The WOTC program includes many target groups. Among these are SNAP (Supplemental Nutrition Assistance Program) recipients, or persons receiving food stamps. It’s highly likely that you may have hired a SNAP recipient or member of a qualified household. According to USDA statistics, in fiscal year 2014, SNAP recipients represented over $10 billion in available tax credits.

With the volume of SNAP recipients in this country, you’ve probably hired untold numbers which met WOTC qualifications. Did you know that roughly one in seven Americans receives this aid? Since the recession, food stamp recipients grew to over 23 million households. The number of children benefiting from the program has nearly doubled to over 15 million since the 2007 recession. All across the country, rural and urban citizens receive food stamps temporarily and long-term.

Hiring a SNAP beneficiary could earn you up to $2400 in tax credit for each new candidate. Qualified candidates must be between 16-39 years old and not have worked for your company before. State workforce departments must receive requests within 28 days of new hires’ start dates.

The great news is these people are easier to identify than you thought possible. By taking advantage of these, and making minor tweaks in your hiring process, you could save thousands in tax dollars. Give us a call at 563-583-2115 to learn how to get started or you can find out how much you have been missing in tax savings by using our free calculator HERE.

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