For many organizations across the country, the COVID-19 pandemic created a variety of financial implications that have had or will have long-ranging effects.
The Work Opportunity Tax Credit (WOTC) is an end-of-the-year Federal spending and tax extension package. It was designed for employers who hire and retain individuals from targeted groups that have experienced substantial employment hurdles.
To maximize the funds your company receives from these types of government tax credits, it’s important that compliant WOTC-related forms are part of your candidate’s workflow. With the Click Boarding platform, guided experiences, engagement and compliance products provide increased engagement and ensure your onboarding efforts are optimized.
Director of Policy Engagement at the Society for Human Resource Management (SHRM) Chatrane Bribal explained the government incentives provided by WOTC “…help both employers that are experiencing labor shortages and certain groups of people who need assistance finding jobs, such as the long-term unemployed, the formerly incarcerated, individuals with disabilities and qualified military veterans.” Bribal added that the SHRM organization strongly supported WOTC when it was introduced, urging Congress to pass the legislation in December 2019.
There are two new WOTC employee retention programs that organizations can take advantage of:
1. Disaster Relief Employee Retention Credit for 2018-2019
Created for businesses impacted by one or more of the 29 FEMA disasters between 2018 and 2019. Examples of FEMA disaster areas include the California wildfires, Hurricane Michael, Hurricane Florence, Midwest Flooding and many others. This WOTC tax credit is potentially worth up to $2,400 for each current employee that earned wages at a disaster location.
2. COVID Employee Retention Tax Credit
The pandemic generated considerable economic turmoil that resulted in widespread job loss, layoffs and furloughs. Employers who suffered temporary or permanent losses as a direct result of COVID-19 may be eligible for a refundable payroll tax credit of up to $5,000 per employee, as long as they were employed by the employer for a minimum of 30 days.
Employers claim more than $1 billion in WOTC tax credits every year. If your company isn’t taking advantage of these valuable incentives, you could be losing money.