The Tennessee Department of Labor and Workforce Development Commission (TDLWD) has issued more than $215 million in Work Opportunity Tax Credits (WOTC) to employers in the first six months of 2017. That puts the state on pace to double the number of tax credits issued in 2016.
According to the TDLWD, in the first six months of 2017, the agency received 162,795 WOTC applications and approved 83,385 of them (51%), totaling $215,445,800 in tax credits for employers. Between January and June 2017, $5 million more in tax credits than the total for all of 2016 has already awarded.
Tennessee has seen significant job growth, with the New York Times recently writing an article on the state’s success in attracting foreign companies, noting: “In Chattanooga and the surrounding region, for example, more than two dozen companies from 20 countries have set up shop, generating billions of dollars in investment, employing thousands of workers and helping drive Tennessee’s jobless rate to 3.6 percent in June, a record low for the state.”
A TDLWD spokesperson told FCCI Insights that bringing the WOTC application process online and greater promoting are contributing to the dramatic increase in WOTC applications and certifications.
“First, we have automated the process, so instead of it taking two or three weeks to make a determination, it now takes a few days,” said the spokesperson. “Previously all documents had to be mailed into the department. We now process applications within 72 hours and strive to do it within 48 hours.
“Second, in conjunction with the automation there has been a greater awareness of the program, therefore more businesses are aware of the benefits of hiring individuals with barriers and in turn are applying at a greater rate.”
“Third, also tied to the automation is the fact that it is so much easier to apply now than it was previously, so businesses are not put off by the process.”
Currently, 30 that states have some sort of automated process for WOTC in place, including Alabama, Alaska, Arizona, Arkansas, California, Colorado, Florida, Georgia, Illinois, Iowa, Kansas, Kentucky, Louisiana, Maryland, Michigan, Minnesota, Missouri, New Jersey, New Mexico, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Utah, Virginia, and Washington. Check with the applicable State Workforce Agency for the states in which your business operates to learn how you can work with your state to take advantage of WOTC.
The Work Opportunity Tax Credit (WOTC) is a fantastic voluntary federal tax credit program to encourage businesses to hire individuals who typically experience significant barriers to employment, such as disadvantaged workers within the federal poverty level, military veterans, and the disabled. It can mean significant tax savings for businesses who employ these individuals.
First Capitol Consulting recently made a presentation on how to generate tax savings using WOTC at the American Institute of CPAs ENGAGE conference. You can obtain a copy of the presentation at the following link.