Have you been trying for months to get a steady job? In today’s job market, it can be difficult, even with the proper experience, to find a well-paying and self-sustaining job. Thankfully a federal tax credit, otherwise known as the WTOC or Work Opportunity Tax Credit can help. Our accountants at JLW Tax & Bookkeeping Services in Springfield, IL are here to support you during tough financial times; keep reading below to learn more about the Work Opportunity Tax Credit and whether or not you are eligible.
What is the Work Opportunity Tax Credit?
The Work Opportunity Tax Credit is a financial assistance benefit that is distributed by the IRS (Internal Revenue Service), IRC (Internal Revenue Code), and DOL (Department of Labor). This tax credit was created to support certain individuals that are employed and still suffering financially due to personal or outside influences that are causing the lack of income. Depending on how much assistance you need will determine the number of funds you are awarded. At JLW Tax & Bookkeeping Services in Springfield, IL, we help individuals get the returns they deserve to thrive financially. Give us a call today to learn more about whether you qualify for the Work Opportunity Tax Credit.
Am I Eligible for a Work Opportunity Tax Credit?
So, if you’re employed, what exactly makes you eligible for the Work Opportunity Tax Credit? You will be able to claim up to $6,000 of wages if you are in your first year of employment, are a certified member of a targeted WOTC group, and have performed at least 400 hours of work for your employer. The targeted groups the WOTC is designed for include veterans, needy families, designated community residents, vocational rehabilitation individuals, ex-felons, summer youth, and persons that are currently unemployed long-term. Of course, there are always exceptions to tax credits, including the WOTC, so make sure to reach out to your local attorneys at JLW Tax & Bookkeeping Services in Springfield, IL to learn more.
As An Employee, How Do I Claim a WOTC?
If you are employed somewhere that is just not cutting it financially, start by reaching out to your employer for an 8850 form that starts the application process for the Work Opportunity Credit. Once you do this, you may be asked by the IRS to supply different forms of identification – if not, your employer will then begin to file your 5884 WOTC form and wait for a response back on your approval. If you or your employer are unsure of the next steps in the filing and approval process, reach out to our experts at JLW Tax & Bookkeeping Services in Springfield, IL. We help employees and employers have a quick and easy filing process when claiming the WOTC.
Can I Get Additional Wage-Based Credits?
Usually, when applying and getting accepted for a wage-based credit, you are not able to claim more than one on your yearly taxes. However, it may be possible to claim the same employee under additional wage benefits including the American Rescue Employee Retention Credit, Empowerment Zone Employment Credit, and more. If your employee is suffering from a natural disaster or family emergency, check with JLW Tax & Bookkeeping Services in Springfield, IL to ensure they are eligible for additional wage-based credits. Give us a call today at 217.679.1872 to get a free quote on your tax services.