CMS’s Brian Kelly answers your questions about the Work Opportunity Tax Credit. This week we’re taking a look back at five of the most common questions we get about the Work Opportunity Tax Credit.
Question One: Is it Worth it to do the Work Opportunity Tax Credit?
CMS Responds: Is it Worth it for Employers to do the Work Opportunity Tax Credits? Absolutely! We know that statistically over the last 20+ years of performing WOTC services that 10-15% of the workforce qualifies for the WOTC program. So, if we have 100 new hires per year, we know 15% of them qualify we say the average tax credit is $2,000. That’s $30,000 in tax credit savings per year. So, absolutely, take advantage of the program.
Question Two: Are Rehires Eligible for the Work Opportunity Tax Credit?
CMS Responds: Are Rehires Eligible for the Work Opportunity Tax Credit? A lot of us have had employees that we maybe let go one time then brought back into the workforce, unfortunately if we have rehires coming back in they are not eligible for the Work Opportunity Tax Credit. It has to be net new employees being hired.
Question Three: What are the benefits of Switching to Paperless WOTC Screening?
CMS Responds: Actually three or four things. Number one we can state that the employer taking advantage of a federal program to initiate jobs and we need their participation. Also, our web-portal is multi-lingual, we can actually go up to 100 different languages so people understand the questions that were asked, and it’s a lot easier for them to respond, and respond positively. So, when we put someone through our web-based screening process we do see an escalation of how many tax credits we get as qualified. It’s about a 30% improvement over paper.
Question Four: What is the most popular WOTC Category or Target Group?
CMS Responds: It’s actually a pretty easy question. SNAP (Supplemental Nutrition Assistance Program/Food Stamps) represents 65% of all the tax credits we get because of people that are on SNAP or Food Stamps. That’s followed by TANF, which is Temporary Assistance to Needy Families, and then hiring the Veterans back into the workforce. SNAP is number one.
Question Five: Why Should I Use a WOTC Screening Service?
CMS Responds: Why should I use a WOTC screening service like yours, obviously CMS’s, when I can do it myself? The reason why you’d choose us is because it’s a little complex, and there’s three different units of our government that oversee the WOTC program. From the I.R.S. giving us its guidelines, to H.U.D. indicating those designated community residents. (The third, which is not mentioned in the video, is the Department of Labor). What we find being a third party service, we can ask those sensitive questions that, as an employer, you might not want to. That is probably the biggest reason of all.
About Our WOTC Screening Services
- Why you should use CMS’s WOTC Tax Screening Service rather than doing it yourself.
- Get an idea of how much you could be saving by utilizing the Work Opportunity Tax Credit for your company, try our WOTC Calculator.
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