Employers set record on tax credits earned for hiring

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Filed on 30. Jan, 2014 in News

Employers in Washington state set a new record when they took in $82 million in federal tax credits last year for hiring certain hard-to-place job seekers, according to the state’s Employment Security Department.

The federal Work Opportunity Tax Credit rewards employers who hire military veterans, people with disabilities, ex-inmates, food-stamp and welfare recipients and individuals who receive Supplemental Security Income. The maximum tax credit can range from $2,400 to $9,600, depending on the eligibility category of each eligible new hire. The credit is deducted from employers’ federal income taxes.

The state’s Employment Security Department administers the program in Washington.

In 2013, the department received more than 56,000 applications from 2,632 Washington businesses. Some 30,744 of the hires qualified for the tax credit.

In 2013, food-stamp recipients represented 73 percent of all certifications. Welfare recipients and veterans were another 16 percent and 6 percent, respectively.

Employers apply for the credit through Employment Security’s website, esd.wa.gov (enter WOTC in the search box). Applications must be submitted within 28 days after the qualifying new employee starts the new job.

Tax credits begin accumulating after an eligible new employee works 120 hours and earns at least $1,118, and the credits reach their maximum after 400 work hours.

Businesses certified for the credit must complete IRS Form 5884 when submitting their federal income taxes.

The Work Opportunity Tax Credit Program officially expired at the end of December 2013, but Congress historically has reauthorized the program back to the date of expiration, according to the Employment Security Department.

 

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bGk+PHN0cm9uZz53b29fc2xpZGVyX2hlYWRpbmc8L3N0cm9uZz4gLSBSZWNlbnQgbmV3czwvbGk+PGxpPjxzdHJvbmc+d29vX3RoZW1lbmFtZTwvc3Ryb25nPiAtIFRoZSBKb3VybmFsPC9saT48L3VsPg==