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+ - SPAM: Automate Hiring for Easier Tax Credits

Submitted by Anonymous Coward
An anonymous reader writes "As the name implies, the Work Opportunity Tax Credit is an incentive for employers to hire certain targeted groups identified as those who have more difficulty acquiring gainful employment. Examples of such groups would be food stamp recipients, ex-convicts, veterans and people with disabilities. It is the objective of the federal government to help such people become productive members of society and actual tax payers and thus reduce the burden on social welfare costs.

The benefit to the employer is apparently in the form of tax credits. The amount varies depending on which category a particular employee belongs to. For a company to avail of this incentive, it is necessary that a WOTC screening/processing is put in place, preferably integrated into the hiring process. One can see this as either an additional load to what may be an already costly process or as a savings opportunity. This largely depends how it is executed and web-based automated employee hiring solutions can actually make the latter perspective a reality.

To get an idea of the potential savings this incentive can offer, here is a rundown of some of the basic mechanics of WOTC:

For most groups, the tax credit amounts to about 40% of the income of a qualified employee. This applies to the first year of employment and the person should have worked a minimum of 400 hours in that period. If the WOTC qualified employee worked a minimum of 120 but less than 400 hours, the amount is 25%. The credit also only applies to the first 6,000 USD of income. One notable exception to this basic rule is the case for veterans, whose wage limit is the first 12,000 USD of income. Remember that this incentive is for every WOTC qualified employee. Thus the more people from any of the targeted groups a company hires, the more tax credits it receives.

Beyond savings, a more social benefit a company can receive from this incentive plan is an enhancement of their reputation. Pursuing WOTC means that a company does not discriminate in its hiring and is actually helping improve the quality of life of the individuals who belong to these targeted groups.

Despite these advantages, some companies still seem to miss out on this opportunity. The common understanding is that the procedures can be quite complex as human resource managers would need to screen every candidate for these particular requirements. Then they would have to submit for certification the properly filled out Form 8850 and 9061 of each candidate. This has to be done within the short time frame of 28 days since the employee started working. As it turns out, this also happens to be the usual employee on-boarding period for new hires.

This is why an automated hiring system is better suited to handle this particular aspect of recruitment. It doesn’t just make things move along faster but it also reduces the amount of human error which in terms of the WOTC can certainly result in opportunity costs."

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Automate Hiring for Easier Tax Credits

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