giving something back, getting something back?
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Giving something back? Getting something back?Leveraging WOTC to lower federal income tax liability
What is WOTC? The Work Opportunity Tax Credit (WOTC) is a program that provides federal tax incentives to employers that hire employees from nine targeted groups who consistently face barriers to employment. The program was most recently renewed through December 31, 2019, under the Protecting Americans from Tax Hikes Act of 2015 (the PATH Act).
In addition to lowering your effective tax rate, hiring WOTC-eligible employees can highlight your civic contributions in the community.
WOTC benefit can be up to $9,600 per eligible employee
Potentially eligible categories include:• Qualified veterans (unemployed,
disabled, food stamp recipients)• Food stamp or other assistance
recipients• Qualified ex-felons• Vocational rehabilitation referrals• Supplemental Security Income
recipients
• Qualified long-term unemployed • Temporary Assistance for Needy
Families recipients • Summer youth employees (living
in empowerment zones) • Residents of empowerment zones or
rural renewal counties
The time is now: WOTC continues to provide corporate and community benefits through December 31, 2019The signing of the PATH Act provided an unprecedented five-year renewal of the WOTC benefit.
The WOTC program continues to be a successful way to help disadvantaged target groups back into the workforce and reduce government assistance spending. In addition, WOTC provides a business tax credit and lowers the effective tax rate for employers that hire qualified individuals. Businesses should consider a review of their WOTC strategy and service provider in an effort to maximize the potential tax credit available.
Ernst & Young LLP’s average annual WOTC increase for employers of all sizes and across multiple industries
In some instances, clients have seen an increase in credits of more than 50% after transitioning from another provider to Ernst & Young LLP.
These examples are illustrative, and the actual amount of benefit will depend upon the taxpayer’s specific facts and circumstances.
Sector Annual new hires Increase in WOTC credit
Retail 110,000 73%
Retail 52,000 41%
Telecom 5,000 34%
Consumer products 7,000 42%
Financial services 13,000 57%
Health care 5,000 48%
Why Ernst & Young LLP for WOTC?• Increased credits: We have a proven track record of increasing tax credits, often by more
than 50%, across all sectors and company sizes.
• Experience: We have been providing WOTC services for more than 16 years, serving many of the Fortune 100 employers and processing more than 10 million WOTC transactions annually. Our team of dedicated implementation professionals has successfully transitioned more than 40 national employers over the past three years.
• Relentless customer service: Our approach to WOTC leverages experienced tax technical, local and national resources designed to increase performance by proactively managing accounts, sharing leading practices and teaming with state workforce agencies to lead the industry and drive additional certifications and credits.
• Technology and innovation: We continue to invest heavily in technology and innovative ways to serve our clients. We were the first to market with WOTC e-signature, mobile screening and integrated services, including applicant tracking and hiring systems to facilitate an efficient and effective process.
Tax · Human Resources · Benef ts
Working together with you
Employment tax
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Reporti
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Work O
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Workforce Advisory Services
Supporting you through the employment life cycle
EY | Assurance | Tax | Transactions | Advisory
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© 2017 Ernst & Young LLP.All Rights Reserved.
SCORE No. 00758-171USCSG No. 1701-2182399 General ED None
This material has been prepared for general informational purposes only and is not intended to be relied upon as accounting, tax or other professional advice. Please refer to your advisors for specific advice.
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Ernst & Young LLP Work Opportunity Tax Credit Services We have a fully integrated team of more than 400 credits and incentives professionals who can help your organization to identify, qualify, pursue and obtain the full spectrum of tax credits available to your business. Our technology-enabled process streamlines compliance requirements and provides the necessary documentation to substantiate credits in the event of an audit.
WOTC, unemployment insurance and the Affordable Care Act all depend on similar workforce data elements and process streams. Leveraging our existing WOTC Services infrastructure, we can help you with a broad spectrum of workforce analytic, reporting and tax compliance needs.
Synergy is the foundation for our technology, data processing infrastructure and tax professional network. Our holistic approach enables efficiency and continuity in your workforce management processes.
For more information, please contact one of the Ernst & Young LLP Workforce Advisory Services professionals below.
General contact — [email protected]
Karen [email protected]+1 214 756 1045
David [email protected]+1 804 344 4510
Contact us at [email protected].