The Work-Opportunity Tax Credit (WOTC) is a credit that many employers should be capturing if they aren’t already doing so. Employers can receive credits for hiring and retaining candidates from specific target groups, such as convicted felons, veterans, and those on government assistance programs such as Supplemental Security Income (SSI).
The process for obtaining WOTC credits is one that has been progressing towards an electronic, automated medium. Currently, about 70% of all states allow employers and third-party vendors to submit candidate applications for WOTC credit electronically. The most recent to have updated their processes are Texas, Nevada, and Delaware.
The State Workforce Agency (SWA) of Texas has allowed third-party organizations and employers to submit applications through email. Via a secure portal, employers and third-party organizations alike will be able to scan the necessary documents to a computer’s location and submit the application package by email. While this process is not fully automated in the sense that candidates are screened online, documents are stored online, and the package is submitted from the same central location. Still, it is a step up from manually mailing the application package. Anticipate more electronic changes to continue in the future.
Effective May 31, 2018, organizations in Delaware are able to submit WOTC applications entirely online. In a platform identical to that of Arizona’s, the entire WOTC process will take place on a streamlined system. The state has a backlog of unprocessed 8850 and 9061 forms that date back to 2015 to deal with, but the new process should make a dent in that figure rather quickly.
The small SWA has requested that organizations submit the information present on the forms in CSV format. Applications dating as far back as 2013 will need to be listed in CSV format if they are to be processed by the SWA. That could be a lot of rework for organizations that are determined to receive historic WOTC credits.
Organizations not interested in re-entering the old information should look outward for third-party specialists who can perform the task on their behalf. This will ensure that WOTC credits are in fact captured. An extensive solution, like TaxAdvantage, may also be an effective solution for organizations as well. Storing sensitive information in a centralized location that is easily accessible is useful for more reasons than one. For organizations with locations in Delaware, Nevada, and Texas – retrieving any pending information requested by the SWA would be a breeze.
In the past, if your organization was not participating in a WOTC program due to specific state limitations, you may want to reconsider.
The number of states still utilizing manual processes for WOTC submission is shrinking and as automation continues to present itself, organizations will be able to more effectively capture WOTC credits with the use of a service like TaxAdvantage. Organizations should also consider implementing a call center. Combining an automated solution with the use of a call center will increase WOTC tax credit certifications. Some employers have reported a five-time increase in credit certifications.
Stay tuned as more states continue to update their processes for accepting WOTC submissions.