At CMS, as Work Opportunity Tax Credit (WOTC) experts and service providers since 1997, we receive a lot of questions via our website’s chat box that we try to answer:
How Does the Work Opportunity Tax Credit Work?
CMS Says: The Work Opportunity Tax Credit (WOTC) is a federal tax credit available to employers who hire and retain individuals from target groups with significant employment barriers to employment. Thoese might include long-term unemployed, SNAP recipients, veterans etc.
How does WOTC Work?
The WOTC Tax credit can be claimed by employers when they screen their new hires to determine if they are eligible.
- Target group the new hire is qualified under
CMS provides this screening as a service. Once an individual is determined to be eligible, and the state workforce agency issues tax credit certification, we track the following:
- Number of hours worked (has to reach a minimum of 120)
- Wages paid to that individual during his or her first year of employment
How Are Tax Credits Calculated?
Employers can earn 25% of the first $6,000 in wages if the employee works a minimum of 120 hours and 40% if the employee works at least 400 hours. The Long Term Family Assistance Target Group is the only credit that is taken over two years.
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.
- Are you a CPA or tax service provider? Find out how you can become a strategic Business Partner.
Contact CMS Today to Start Saving!
In over 20 years of providing valuable WOTC Screening and Administration services we’ve saved millions for our customers.
Contact CMS today to start taking advantage. Call 800-517-9099, or click here to use our contact form to ask any questions.