The Work Opportunity Tax Credit (WOTC) program has sometimes been viewed with a negative stigma. The reality is that candidates eligible for the WOTC certification are hired every day to work in most industries, ranging from restaurants to retail to banking. It’s also true that one in five job candidates are eligible for WOTC certification.
Most important, hiring candidates that are WOTC eligible can mean an influx of cash into your operations come tax time. A single tax credit from WOTC can range from $1,200 to $9,600 per individual and goes straight to your organization’s bottom line. As they say when pitching the lottery, “You can’t win if you don’t play.”
With solutions like TaxAdvantage available to use, WOTC certifications are much easier to obtain than before. They make the odds of winning financially with WOTC much higher.
It starts with integrating the WOTC into your organization’s hiring process. To maximize the potential for WOTC certifications, screen 100% of the candidates that apply for a job. Using electronic processes for collecting the data obtained in the candidate screening process can help streamline the screening process. Many automated workforce management platforms include the WOTC questionnaire in the hiring process. These platforms also store and organize vital documents that can support and verify the authenticity of the WOTC credit, eligibility, and certification. Combining software with a vendor who offers a call center to do follow-up questions with candidates in a way that meets all regulatory requirements can increase your WOTC certifications significantly.
Timing is crucial to maximizing success. An employer only has 28 days from an employee’s date of hire to screen and process them for WOTC. Currently, 39 states have electronic systems that can transmit data to the necessary State Workforce Agencies to process the WOTC requests. For other states, you will need to paper file. A third-party vendor with experience with WOTC can help you set up a system for success.
Finally, establish goals for your WOTC efforts. Without visibility on how your organization is handling WOTC capture, it’s difficult to know how much better you could be doing. Establish a benchmark, monitor your internal practices, and generate actionable reports.
WOTC success ultimately is contingent upon the resources you have. If you decide to incorporate the WOTC program for your organization, you may want to avoid doing it by paper. Manually entering paper information into a system is prone to human error. A call center in conjunction with an online automated workforce management platform can be the best solution for most organizations.
However, the most important step is to get into the process. Employment tax credits through WOTC can make a meaningful financial contribution to your organization while providing important community benefits by hiring veterans, the long-term unemployed, and the disabled, among others.
And that’s a winning proposition all the way around.