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The Work Opportunity Tax Credit (“WOTC”) is a federal tax credit for businesses hiring job seekers that have traditionally faced barriers to employment in the past. Fill out your email below to learn how your businesses can use this benefit to get rewarded for your hiring practices.
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Why choose Parachor for the Work Oppurtunity Tax Credit consulting?
At Parachor Consulting, we employ a team of CPAs, attorneys, engineers, and statisticians to provide unparalleled specialty tax services. Our custom tailored process to each individual business is targeted towards delivering the maximum tax benefit legally possible.
- Maximize your benefit
- Reduce audit risk
- Free audit defense
- Straightforward process
We make the WOTC tax credit simple.
Uche & Chris here...
We take our 15+ combined years of experience in tax consulting services to the table with each and every client. Working for large consulting firms helped us learn the best processes, but also showed us there’s often a lot left on the table when it comes to tax credits. We bring large firm experience and give you the small firm care and service you deserve. We work with our clients directly, ensuring that stat sampling projects is faster, substantiation is better, and your risk of audit is lower.
Working with Parachor
- Audit Defense
- Quick & Easy Processes
- Work 1 on 1 With the Owners
- Comprehensive Documentation
- We are Passionate About Our Clients
Other tax consulting services
- Audit “Support”
- Complicated & Time Consuming
- Outsourced Services
- Little to No Documentation
- You're Just a Number
Client case studies
Location: California
Employees: 28
Entity Type: S-Corp
Activities:
Developing unique energy efficient features, performing structural engineering for projects with complex topography, and performing civil engineering modeling to create drainage plans.
Revenue: $ 2,300,000.00
Refund Amount: $ 280,000.00
Location: Texas
Employees: 14
Entity Type: S-Corp
Activities:
Design and testing of new products for horizontal drilling and fracing operations.
Revenue: $ 1,900,000.00
Refund Amount: $ 54,000.00
Location: Wisconsin
Employees: 19
Entity Type: S-Corp
Activities:
Performing drainage studies to remove stormwater from project sites, designing and developing of mid-size housing subdivisions, and engineering modeling of environmental impacts of housing developments.
Revenue: $ 2,000,000.00
Refund Amount: $ 40,000.00
Location: Wisconsin
Employees: 26
Entity Type: C-Corp
Activities:
Developing unique energy efficient features, developing schematic designs, and designing site orientations.
Revenue: $ 750,000.00
Refund Amount: $ 91,000.00
Our simple Work Opportunity
Tax Credit process
1. Value Identification
Let's get started! Parachor will conduct an assessment of your company activities and finances. Once complete, Parachor will deliver a no-obligation estimate of the tax benefit.
2. Benefit Delivery
Time to get technical. Parachor will gather and analyze additional information relating to the qualified work. Parachor will calculate the specific benefit amount, and conduct a thorough financial and legal review before delivering your numbers.
3. Substantiation Report
How did we do it? Parachor will draft a comprehensive report following IRS directives to substantiate the work completed to calculate the benefit.
Work Opportunity
Tax Credit FAQs
Businesses can claim this tax credit against federal taxable income for the year that the credit was earned. This credit is non-refundable, which means the business must have tax liability to offset. However, if you are unable to use the full amount of the credit in any given year, you may carry the credit back one year and carry it forward for up to 20 years.
The employee must complete IRS Form 8850, and the business must complete ETA Form 9061 or ETA Form 9062. These two forms must be sent to the designated local agency to certify the employee for the WOTC program.
Businesses that hire unemployed veterans, individuals on specific welfare programs, ex-felons, and individuals with disabilities will receive a tax credit if the jobseeker works at least 120 hours.
The rules for this program are ever-changing. Let Parachor help you manage your WOTC program to identify candidates, calculate credits, and submit WOTC applications so you can get a tax credit for giving target group job seekers an opportunity.
Disabled veterans with a service-connected disability who have been unemployed for at least six months
Veterans who have been unemployed for at least six months
Disabled veterans with a service-connected disability
Veterans receiving Supplemental Nutrition Assistance Program (SNAP) benefits
Veterans who have been unemployed for at least four weeks
Long-Term Family Assistance recipients who are members of a family that has received Temporary Assistance for Needy Families (TANF) benefits for at least 18 consecutive months
TANF recipients
Ex-felons
Designated community residents
Vocational rehabilitation referrals
SNAP (food stamp) recipients
Supplemental Security Income recipients
Long-Term Unemployment Recipients
Summer Youth program participants who are 16 to 17 years old, work between May 1 and September 15 and live in an empowerment zone
The credit to for-profit employers is 25% of qualified first-year wages for those employed at least 120 hours but fewer than 400 hours, and 40% for those employed 400 hours or more. For Long-Term Family Assistance recipients, WOTC is based on a two-year retention period. However, there is a maximum amount of tax credit that can be generated for each employee, which is displayed in the chart below.
Veteran Target Group | Maximum Tax Credit |
Disabled veterans with a service-connected disability who have been unemployed for at least six months | $9,600 |
Veterans who have been unemployed for at least six months | $5,600 |
Disabled veterans with a service-connected disability | $4,800 |
Veterans receiving Supplemental Nutrition Assistance Program (SNAP) benefits | $2,400 |
Veterans who have been unemployed for at least four weeks | $2,400 |
|
|
Non-Veteran Target Group | Maximum Tax Credit |
Long-Term Family Assistance recipients who are members of a family that has received Temporary Assistance for Needy Families (TANF) benefits for at least 18 consecutive months | $9,000 |
TANF recipients | $2,400 |
Ex-felons | |
Designated community residents | |
Vocational rehabilitation referrals | |
SNAP recipients | |
Supplemental Security Income recipients | |
Long-Term Unemployment Recipients | |
Summer Youth program participants who are 16 to 17 years old, work between May 1 and September 15 and live in an empowerment zone | $1,200 |
On or before the day that an offer of employment is made, the employer and the job applicant must complete Form 8850 (Pre-Screening Notice and Certification Request for the Work Opportunity Credit). The employer has 28 calendar days from the new employee’s start date to submit Form 8850 to the designated local agency located in the state in which the business is located (where the employee works). Additionally, the employer must complete and submit ETA Form 9061 (Individual Characteristics Form) within 28 days of the employee’s start date to the designated local agency. The employer will then file a Form 5884 on their tax return to calculate and claim the work opportunity tax credit against income taxes.