Call Us: (563) 583-2115
Call Us: (563) 583-2115

WOTC Tax Credits

Ensuring Legally Compliant Tax Credit Claims

Creating a well-documented and legally compliant audit trail for credits claimed is essential for small businesses seeking to maximize their tax savings while ensuring compliance with tax laws. At Tax Credit Group, we understand the importance of maintaining thorough documentation to support the tax credits claimed by our clients. Our team is dedicated to creating a robust audit trail that stands up to scrutiny and provides peace of mind to our clients during tax audits.

By meticulously documenting the activities and expenditures that form the basis of tax credits claimed, we help our clients demonstrate the legitimacy of their claims and ensure that they are well-prepared to navigate any potential audits. Our approach involves:

Comprehensive Record-Keeping

We work with our clients to maintain comprehensive records of all relevant business activities, expenditures, and supporting documentation. This includes keeping detailed records of research and development activities, hiring practices, energy-efficient investments, and other qualifying activities for tax credits.

Legal Compliance

Our team stays up-to-date on the latest tax laws and regulations to ensure that the audit trail we create meets all legal requirements. We meticulously document all activities in accordance with the relevant tax credit guidelines, providing our clients with confidence in the compliance of their claims.

Transparency and Accuracy

We prioritize transparency and accuracy in our documentation process, ensuring that all information provided is clear, consistent, and verifiable. By maintaining a high standard of documentation, we help our clients build a strong case for the tax credits they claim.

Expert Guidance

Our team of tax professionals provides expert guidance throughout the documentation process, offering insights into best practices for maintaining an audit trail and ensuring that our clients are well-prepared for any potential audits.

Tax Credit Group

If you’re seeking a partner to help you navigate the complexities of tax credits and ensure the creation of a robust audit trail, contact Tax Credit Group today. With our expertise and dedication to legal compliance, we can help you maximize your tax credits while maintaining the integrity of your documentation.

Maximizing Tax Credits for Small Businesses

As a small business owner, you’re constantly looking for ways to maximize your profits and minimize your expenses. One often overlooked opportunity for savings is through tax credits. Tax credits can significantly reduce your tax liability, putting more money back into your business. At Tax Credit Group, we specialize in helping businesses like yours navigate the complex world of tax credits to maximize your savings.

Research and Development Tax Credit

Many small businesses are unaware that they may be eligible for the Research and Development (R&D) tax credit. This credit is designed to incentivize businesses to invest in innovation and technological advancement. If your business engages in activities such as developing new products, processes, or software, you could be eligible for substantial tax savings. Our team at Tax Credit Group can help you identify qualifying R&D activities and ensure that you claim the credit accurately.

Work Opportunity Tax Credit

The Work Opportunity Tax Credit (WOTC) is another valuable credit that many small businesses overlook. This credit is designed to encourage the hiring of individuals from certain target groups, such as veterans, ex-felons, and individuals receiving government assistance. By hiring from these groups, your business could be eligible for a tax credit ranging from $1,200 to $9,600 per qualified employee. Our experts can assist you in navigating the WOTC program and maximizing your potential savings.

Energy-Efficient Tax Credits

Investing in energy-efficient equipment and facilities can not only save your business money on operating costs but also make you eligible for valuable tax credits. There are various federal and state tax credits available for businesses that invest in energy-efficient technologies, such as solar panels, energy-efficient HVAC systems, and electric vehicles. Our team can help you identify eligible energy-efficient investments and ensure that you claim the available tax credits.

Maximizing Your Tax Credits with Tax Credit Group

When you partner with Tax Credit Group, you can expect personalized attention and a thorough analysis of your business activities to identify all potential tax credit opportunities. We’ll work closely with you to ensure that you’re taking full advantage of available credits, maximizing your tax savings, and ultimately improving your bottom line.

Contact Tax Credit Group today to learn how we can help you maximize your tax credits and keep more money in your business’s pocket.

The Power of the Work Opportunity Tax Credit Program

The Work Opportunity Tax Credit (WOTC) is a valuable federal tax credit program that incentivizes employers to hire individuals from specific target groups who face barriers to employment. By participating in the program, employers can not only make a positive impact on their communities but also benefit from significant tax savings.

WOTC

Target Groups

The WOTC program targets various groups, including veterans, individuals with disabilities, ex-felons, Temporary Assistance for Needy Families (TANF) recipients, Supplemental Nutrition Assistance Program (SNAP) recipients, and more. Each target group has its own eligibility criteria and corresponding tax credit tier amounts.

Exploring Benefits

Veterans who have been unemployed for at least four weeks can qualify for a tax credit of $2,400, while disabled veterans can yield a maximum credit of $9,600. TANF and SNAP recipients, as well as designated community residents, may be eligible for a tax credit of $2,400. Other target groups, such as vocational rehabilitation referrals, ex-felons, Supplemental Security Income (SSI) recipients, and long-term unemployment recipients, also have their respective tier amounts.

Claiming the WOTC

To claim the WOTC tax credit, employers must obtain certification from the appropriate state workforce agency or participating agency before filing their federal income tax return. It’s crucial to stay updated on the latest guidelines and regulations associated with the program, as eligibility criteria and requirements may change over time. Employers should consult the official resources provided by the U.S. Department of Labor and the Internal Revenue Service (IRS) to ensure compliance and maximize their tax savings.

Promoting Diversity and Inclusivity

Participating in the WOTC program not only offers financial benefits but also allows employers to contribute to the economic empowerment of individuals facing employment barriers. By hiring from these target groups, businesses can make a positive social impact while simultaneously reducing their tax liability.

Maximizing Benefits

The Work Opportunity Tax Credit (WOTC) program provides a win-win situation for employers and individuals facing employment challenges. By taking advantage of this program, employers can access valuable tax credits while promoting diversity and inclusivity in their workforce. Stay informed about the latest guidelines and requirements to make the most of this beneficial program and contribute to a more inclusive society.Give us a call at (563) 583-2115 to get started today, or schedule an appointment with one of our advisors.

Tax Credit Guide for Non-Profit Organizations

Non-Profit Organizations

Managing finances can be challenging for non-profit organizations. Fortunately, tax credits are available that can help non-profits save money and reinvest it in their mission.In this article, we will explore some of the federal and state tax credits that non-profits can take advantage of, as well as other tax credits and exemptions that can benefit them.

Federal Tax Credits

New Markets Tax Credit:

This credit allows non-profits to claim 39% of their total investment over a seven-year period if they invest in low-income communities. By utilizing this credit, non-profits can support economic development in disadvantaged areas.

Federal Tax Credits for NP

Work Opportunity Tax Credit:

Non-profits that hire individuals from targeted groups, such as veterans or individuals receiving government assistance, can claim a percentage of the first-year wages of these employees. This credit encourages non-profits to provide employment opportunities to those who face barriers to finding work.

Empowerment Zone Tax Incentive:

Non-profits operating in designated empowerment zones can claim 20% of the first $15,000 in wages paid to employees residing in these zones. This credit aims to stimulate economic growth and job creation in economically distressed areas.

Research and Development Tax Credit:

Non-profits engaged in research and development activities can claim a percentage of the expenses related to these activities. This credit encourages innovation and technological advancement within the non-profit sector.

State Tax Credits

State Historic Tax Credits:

Non-profits involved in preservation and restoration activities on historic properties can usually claim a percentage of the related expenses. This credit promotes the preservation of cultural heritage and historic landmarks.

Charitable Tax Credit

State Job Creation Tax Credits:

Non-profits that create new jobs within their state can claim a percentage of the total wages paid to these employees. This credit incentivizes non-profits to contribute to local job growth and economic development.

State Renewable Energy Tax Credits:

Non-profits investing in renewable energy projects can usually claim a percentage of their total investment. This credit encourages the adoption of clean and sustainable energy sources.

State Sales Tax Exemptions:

Depending on the state, non-profit organizations may be eligible for exemptions from state sales taxes on certain purchases, such as goods used for charitable purposes.

Tax Credits for Non-Profit Fundraising

Charitable Gaming Tax Credits:

Some states provide tax credits for non-profit organizations that conduct charitable gaming activities, such as raffles or bingo.

Film Production Tax Credits:

In certain states, non-profit organizations involved in film production or hosting film festivals may be eligible for tax credits.

Tax Credit Group Can Help

Tax credits can be an effective way for non-profit organizations to save money and reinvest it in their mission. Non-profits should explore all available tax credits to maximize their savings and allocate more resources towards their mission. Please note that tax laws and credits can vary by jurisdiction, so it’s important for non-profit organizations to consult with tax professionals such as Tax Credit Group or legal advisors to determine their eligibility and specific requirements for these credits.

How to Effectively Claim the Work Opportunity Tax Credit

The Work Opportunity Tax Credit (WOTC) is a valuable incentive program to potentially reduce your tax liability while making a positive impact in your community. As a small business owner, you have the opportunity to uncover the immense benefits and potential that tax credits can have on your business. In this article, we’ll break down the basics of the WOTC and explain how it can benefit both your business and the individuals you employ.

Determine Employee Eligibility

The first step in claiming the WOTC is to determine whether an employee falls into one of the targeted groups specified by the IRS. These groups include qualified IV-A recipients, qualified veterans, qualified ex-felons, designated community residents, vocational rehabilitation referrals, summer youth employees, SNAP recipients, Supplemental Security Income recipients, long-term family assistance recipients, and qualified long-term unemployment recipients.

Apply for Certification

To certify that an employee qualifies for the WOTC, you need to submit these forms to the state workforce agency (SWA) in your state within 28 calendar days from the employee’s start date.

  1. Have the job applicant complete Form 8850 before or on the day of making a job offer.
  2. Complete the remaining sections of Form 8850 at the time of the job offer.
  3. Fill out the conditional certification Form 9061 (or request Form 9062 if the applicant already has it).
  4. Check to see if any additional forms are required for the applicant’s specific targeted group.
  5. The SWA will provide you with a letter confirming the employee’s eligibility or denial.

Tax Credit Calculation

Once an employee is certified as eligible for the WOTC, you need to determine the qualified wages that can be considered for the tax credit. Qualified wages are the wages on which you paid Federal Unemployment Tax Act (FUTA) tax during the employee’s first year of work. However, wages paid while receiving payment from a federal on-the-job training program or reduced by Social Security Act payments should be excluded.

Additionally, you need to identify the maximum allowable wages for each employee category, which depend on the target group. These limits can be found in the IRS instructions for Form 5884.

Claim the Work Opportunity Tax Credit

  1. Use Form 5884 (or Form 5884-C for tax-exempt organizations that hired qualified veterans) to calculate the allowable credit based on the qualified wages determined in your tax credit calculation.
  2. Enter the maximum allowable wage on Form 5884, Line 1A (for employees working between 120 and 400 hours) or Line 2 (for employees working more than 400 hours).
  3. Transfer the calculated credit to Form 3800, General Business Credit , which will be filed with your business tax returns.
  4. Keep a record of the certification and all supporting documentation for future reference and potential audits.

Successfully claiming the Work Opportunity Tax Credit can result in significant tax savings for your business while fostering employment opportunities for individuals from targeted groups. By following the steps outlined in this guide, you can navigate the process with confidence and maximize the benefits of the WOTC program.

Let Us Help

At Tax Credit Group, we specialize in helping businesses identify and claim various tax credits and incentives. Reach out to our team of experts to streamline the WOTC process and ensure you receive the maximum benefit from this valuable tax credit.

The Benefits of Work Opportunity Tax Credits

As a business owner, it’s important to be aware of all the tax incentives that are available to you. One such incentive is the Work Opportunity Tax Credit (WOTC), a federal tax credit for employers that hire individuals from specific groups that have historically faced barriers to employment.

Eligible Employee Groups

Eligible employee groups for WOTC include veterans, individuals receiving public assistance, ex-felons, and several other groups. Hiring from these groups not only promotes diversity and inclusion in the workplace, but it also allows businesses to take advantage of the WOTC tax credit.

Tax Credit Amounts

The tax credit amounts available vary based on the length of time the employee works for the company and the employee’s wages. According to the official IRS website for the WOTC program, businesses can claim up to $9,600 per eligible employee, depending on the employee’s specific target group and the number of hours worked. This can add up to significant savings for businesses, especially those in industries with high turnover or recruitment costs.

Applying for WOTC

One of the benefits of the WOTC program is that it is not limited to certain industries or regions. As stated by the Department of Labor, any for-profit business, tax-exempt organization, or government entity that employs individuals in the United States may be eligible to claim the credit. This means that businesses of all sizes and in all industries can take advantage of the program.

State Specific Credits

In addition to the federal WOTC, many states also offer their own WOTC program, which can provide additional tax savings for businesses.

Tax Credit Group

The Work Opportunity Tax Credit is a valuable incentive for businesses that hire individuals from specific groups that have historically faced barriers to employment. By taking advantage of this tax credit, businesses can not only promote diversity and inclusion in the workplace, but also reduce their tax bill and generate a return on investment. If you want to take advantage of this opportunity and other credits your business may qualify for, don’t hesitate. Contact Tax Credit Group so we can help you navigate the process and maximize your savings.

Lucrative Tax Incentives for Employers

As a tax credit consultant, it is our job to help businesses navigate the complex world of tax incentives and deductions. We specialize in helping employers take advantage of the many lucrative tax incentives available to them. In this article, we will be sharing some of the key incentives that employers should be aware of and how they can take advantage of them.

Supporting the Community

First, let us talk about supporting the community. Many states offer tax incentives for businesses that make charitable donations or sponsor community events. For example, some states offer credit for businesses that sponsor local little league teams or make donations to food banks. By giving back to the community, businesses can feel good about doing their part but also benefit from a reduced tax bill.

Hiring

Another way for employers to take advantage of tax incentives is by hiring from specific groups. The Work Opportunity Tax Credit (WOTC) program is a great example of a valuable tax incentive for employers. This program provides tax credits to employers who hire individuals from certain targeted groups who have consistently faced significant barriers to employment. By hiring from these groups, employers can reduce their tax bill while also helping to promote diversity and inclusion in the workplace.

Development Opportunities

Offering training and skill development is also a terrific way for employers to take advantage of tax incentives. Many states offer tax credits for businesses that invest in employee training and development programs. By providing opportunities for employees to improve their skills, employers can also improve the productivity and performance of their workforce.

New Jobs

Finally, bringing new jobs to the community is another way for employers to take advantage of tax incentives. Many states offer tax credits for businesses that create new jobs or expand their workforce. By investing in new hiring, businesses can also grow their operations..

Tax Credit Group

There are many lucrative tax incentives available to employers that can help them save money while also supporting the community, promoting diversity, and investing in employee training and development. If you are an employer and want to take advantage of these incentives, it is important to consult with a tax credit consultant. Call us today at (563)583-2115 to ensure that you are maximizing your savings.

WOTC By The Numbers

Here’s a brief look at the WOTC certifications to date for 2020.

  • Over 1.6 million certifications were issued for 2020.
  • 1.1 million certifications were issued for SNAP recipients. This accounts for just over 68% of all certified groups.
  • The smallest target groups were the summer youth recipients, which none were certified and the disabled veterans with less than 1% certified.
  • Texas led all states with over 135,000, followed by California, Ohio, Illinois, Florida, Pennsylvania and New York.
  • The States with the fewest included Maine, Alaska, New Hampshire, Puerto Rico, Virgin Islands.

Earn Credit for Hiring Unemployment Recipient

There’s no doubt that COVID has dealt the nation’s economy a tough blow. Case in point are the sheer number of jobless claims made nationwide since the pandemic began. Just five months ago, unemployment sat around three to four percent.  According to the U.S. Bureau of Labor Statistics, in June, states’ unemployment numbers averaged more than nine percent.

If your business is hiring right now, you may very likely be hiring someone who received unemployment insurance this year. Therefore, you may qualify for the Work Opportunity Tax Credit (WOTC).

Individuals who have been unemployed at least 6 months may qualify your company for the WOTC federal tax credit. You could save as much as $2,400 for each approved new hire and in some cases, as high as $5600 for veterans who have been unemployed.

Eligibility is based on a few factors. New hire applications must be submitted within 28 days of their hire date. Additionally, applicants must work at least 120 hours throughout the twelve months following their hire date.

To learn more, feel free to reach out to us or visit us online at www.taxcreditgroup.com.

False Claims Act – How it Could Affect Your PPP Claim

When the CARES Act was announced, it ignited a glimmer of hope within the small business community. Many companies were either closed or saw their revenue drop drastically as a result of the novel coronavirus.

But hope quickly disappeared as major corporations found a way to access the money that was meant for America’s small businesses. The money within the Paycheck Protection Program (PPP) quickly disappeared. Just days after the program was put into action, it ran out of money.

The federal government replenished the funds when it realized large corporations like Shake Shack ($10 million) and Ruth’s Chris ($20 million) were receiving funds while small mom and pop shops missed out. Both Shake Shack and Ruth’s Chris have since said they will not accept the money, however, the move brought attention to a large loophole in the PPP legislation. The ability of large corporations to access PPP funds.

The False Claims Act

And that leads us to the False Claims Act.

The False Claims Act, according to Cornell Law School, is “Federal statute setting criminal and civil penalties for falsely billing the government, over-representing the amount of a delivered product, or under-stating an obligation to the government. The False Claims Act may be enforced either by the Justice Department or by private individuals…”

It’s a law, that if used, would allow the federal government to pursue criminal and civil penalties against any company that misuses the PPP.

Should a Small Business Owner Be Worried?

This week, headlines like “For PPP recipients: You may be the subject to whistleblower lawsuits under false claims law” showed up in publications like the Witchita Business Journal.

The article is at least in part “clickbait” since it’s designed to get you to pay for a subscription so you can read the article. However, the crux of the argument is founded in truth.

US Secretary of the Treasury Steven Mnuchin has made multiple comments about the loans issued through the PPP and has promised that people taking advantage of the PPP will face “severe consequences”. He’s also promised that loans of $2 million or more will be audited before the government decides if it will forgive the loan amount. Mnuchin has also tossed around the words “criminal liability”.

Of course, you should be worried if you knowingly and deliberately defrauded the federal government. However, most small business owners are probably too small in the eyes of the government to warrant prosecution.

The comments from Mnuchin and the False Claims Law itself were designed for large corporations and businesses taking advantage of the federal government. Odds are, the government will not be pursuing you if you managed to secure a $10,000 PPP loan.

What if I’m Still Worried?

If you’re still worried and you want to find out more, the IRS and Small Business Administration (SBA) are trying to keep you informed. The Treasury Department has issued an entire document of FAQs to address concerns of borrowers. You can read it here.

Don’t Be Afraid to Ask for Help

We here at the Tax Credit Group have spent hours upon hours looking at, analyzing, and evaluating the CARES Act as well as all the legislation and updates that have come from the IRS, the SBA, and other government agencies. We are keeping up with the headlines and the rules and regulations behind those headlines.

If you’re a small business owner and you find yourself in doubt, please don’t hesitate to reach out to us here and ask a few questions. We would be happy to answer them or at least research until we have an answer. There’s a lot of material out there right now and a lot of changes and we want to make sure our clients, our friends, and our family stay informed.

© Copyright 2022 Tax Credit Group, Inc.

3500 Dodge Street Suite 302 | Dubuque, IA 52003 | (563) 583-2115