What to know about the Work Opportunity Tax Credit and VOW to Hire Heroes Act

If your temporary staffing firm hires employees from several designated categories, you may qualify for the Work Opportunity Tax Credit. Hiring from among veterans, vocational rehabilitation referrals, ex-felons, summer youth employees, those who receive Temporary Assistance for Needy Families, Supplemental Security Income or food stamps or other designated community residents can not only help you attract qualified employees but benefit your business financially, as well.

 

The Work Opportunity Tax Credit allows employers to earn between $1,200 and $9,600 per employee hired, depending on his or her target group and the number of hours worked.

 

U.S. employers claim more than $1 billion in tax credits annually through the program, which aims to help employ those in special groups that face barriers to employment, while increasing America’s economic growth and productivity, according to the U.S. Department of Labor. Full-time, part-time and temporary staffing employees are eligible for the credit, and there is an unlimited number of qualifying new hires.

 

To apply for the WOTC:

 

  1. Complete IRS Form 8850 before a job offer is made.
  2. Complete either ETA Forms 9061 or 9062, depending on whether the employee has been conditionally certified as belonging to a WOTC target group by a qualifying agency.
  3. Submit the completed and signed forms to your state WOTC coordinator within 28 days of the employee’s start date.
  4. Wait for determination of eligibility.
  5. File for the tax credit with the Internal Revenue Service.

 

The VOW to Hire Heroes Act provides additional incentives for employers that hire and train unemployed veterans or those with service-connected disabilities, according to the U.S. Department of Veterans Affairs. The Special Employer Incentives program for veterans who face extraordinary obstacles to obtaining employment provides reimbursement of up to 50 percent of the veteran’s salary, training assistance, necessary tools, equipment, uniforms and more.

 

Interested staffing firms should call the VA at (800) 827-1000 and ask to speak with the Vocational Rehabilitation Division, or visit a VA regional office.

 

For more information on the Work Opportunity Tax Credit and VOW to Hire Veterans Act, visit www.doleta.gov/wotc or http://benefits.va.gov/vow.