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Tax Benefits for Hiring Targeted Groups
The Work Opportunity Tax Credit (WOTC) is a valuable tax break for businesses that hire workers from certain targeted groups. Although it has been available in some form for many years, it tends to be overlooked. Currently, the WOTC is available only for businesses that hire employees that begin work before Jan. 1, 2014. Although […]
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The Work Opportunity Tax Credit (WOTC) is a valuable tax break for businesses that hire workers from certain targeted groups. Although it has been available in some form for many years, it tends to be overlooked. Currently, the WOTC is available only for businesses that hire employees that begin work before Jan. 1, 2014. Although it may be extended, taking advantage of it now will ensure that your business benefits no matter what Congress decides.
Simply stated, the WOTC provides a tax credit to employers who hire members of certain targeted groups. The credit is worth 40 percent of first-year wages up to a maximum amount. Depending on the classification of the employee, the maximum credit can range from $2,400 to $9,600. The greatest tax benefits are provided to employers who hire long-term, family-assistance recipients, or veterans with a service-connected disability who have aggregate periods of unemployment of six months or more in the 12-month period ending on the date of hire.
Legislation passed in 2011 expanded the WOTC to include liberalized rules for a number of other groups of qualifying veterans, including those who are a member of a family receiving assistance under the Supplemental Nutrition Assistance Program (SNAP or food stamps) for at least three months in the 15 months prior to hiring, those unemployed for aggregate periods totaling at least four weeks in the 12 months prior to hiring, and those with a service-connected disability hired not more than one year after being discharged or released from active duty.
Other targeted groups include qualified recipients of temporary assistance to needy families, qualified ex-felons hired no later than one year after conviction or release from prison, designated community residents age 18 through 39, vocational rehabilitation referrals, qualified SNAP recipients age 18 through 39, and qualified Supplemental Security Income (SSI) recipients. There is also a more limited credit for designated summer youth employees age 16-17.
To be eligible for the WOTC, a new employee must be certified as a member of a targeted group by a State Employment Security Agency (SESA). You must receive the certification by the day the employee begins work or complete a pre-screening notice and certification request on or before the day you offer the individual a job and submit it to the SESA within 28 days after the employee begins work. Since the process is somewhat involved, you should start early to have your employees certified before year-end.
Tax-exempt organizations can also claim a payroll-tax credit, subject to certain limits, for hiring qualifying veterans. If you are considering hiring WOTC-eligible individuals, you should consult your tax adviser for the specific benefits available to you and the process you should follow to ensure that you receive the maximum benefit.
Eileen C. Semmler, CPA is a tax partner in the Small Business Advisory Group of The Bonodio Group.
Do You Accept Soft Corruption?
Here is a piece of corruption that is all too common among politicians. The guy who is about to be elected the next mayor of the Big Apple, Bill de Blasio, was formerly a Brooklyn city councilman. Sometime around 2005, his wife, Chirlane McCray, was looking for a job. So, he introduced her to the
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Here is a piece of corruption that is all too common among politicians.
The guy who is about to be elected the next mayor of the Big Apple, Bill de Blasio, was formerly a Brooklyn city councilman. Sometime around 2005, his wife, Chirlane McCray, was looking for a job. So, he introduced her to the CEO of a hospital in his district.
On the city council, de Blasio had pushed for millions of taxpayer bucks for the hospital, Maimonides Medical Center. The hospital had good reason to be grateful to him. It had reason to believe it might be punished if it did not find her a job.
But, Maimonides had no job open. So, it created one — just for the councilman’s wife. Funny that. Because various city hospitals have found many jobs for wives and friends and relatives of politicians. These happen to be politicians who stream millions of dollars to the hospitals. It’s all just a coincidence, of course.
Such was the work of Hillary Rodham Clinton at a Little Rock law firm. She got the job because she was the governor’s wife. And, the firm got lots of work as a result.
Michelle Obama landed a fat job with few qualifications, at the University of Chicago Medical Center — while her husband served in a powerful political position.
If you pry, you will find thousands of these jobs all over this state and nation. They are the fruits of soft corruption. The type of corruption too many of us accept. We just shrug and say, “What’s new? Politicians have always done this stuff.”
Are these no-show jobs? Some of them. Are they nudge and wink jobs? Jobs that pay $300,000 for $50,000 worth of work? Often.
Are they “If you know what’s good for you…” jobs? That is, if you want the tax money to keep flowing your way, you had better find a job for my wife/pal/nephew. Yes, many of them are such positions.
When Monica Lewinsky held a razor to Bill Clinton’s political throat? His pal Vernon Jordan hit up some big companies to find a big job for the temptress. To shut her up. Companies responded rather than risk the back of the hand of the president.
So, you shrug this off. You say it doesn’t hurt you in any way. Maybe it doesn’t. And maybe it does.
How many bucks — your tax dollars — get wasted this way? How many millions are shoveled to projects only because somebody needs to be rewarded? How many legitimate candidates lose out on jobs because they have no connections to elite political figures?
Meanwhile, how much do the inefficiencies cost? Those that come from unqualified people filling jobs they screw up.
We cannot know. But we cannot deny that this corruption carries a price tag.
It also breeds cynicism among those who work under such appointees. And among those who know about this stuff and never bother to apply for jobs — because they know the game is rigged.
It breeds a cynicism among voters. They lose faith in a system that allows and encourages this stuff. They come to believe that one hand washing the other leaves both hands filthy. In Albany. In city and town governments. In Washington, DC.
If enough of us dwell on stuff like this, we could come up with a new dance. C’mon, everybody, let’s Shrug! During the dance, somebody picks your pocket.
From Tom…as in Morgan.
Tom Morgan writes about political, financial, and other subjects from his home near Oneonta, in addition to his radio shows and new TV show. For more information about him, visit his website at www.tomasinmorgan.com
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