Tax Credit Services

transcript

Tax Credit Services

Bureau of Workforce Development Partnership651 Boas Street, 12th Floor

Harrisburg, PA 17121

Tax Credit Services

Agenda

•Work Opportunity Tax Credit•Federal Bonding Program•Questions and Answers

Work Opportunity Tax Credit

What is WOTC?

WOTC is a Federal tax credit available to employers who hire and retain Veterans and individuals from other target groups with significant barriers to employment.

Program Highlights• Savings for employers• No limit on the number of new hires• Any size employer can benefit• Qualified “tax-exempt” (i.e., 501(c))

organizations are now eligible to claim the WOTC for Veteran new hires.

Target Groups• Veterans – 5 categories• TANF Recipients• SNAP (Food Stamps) Recipients• Designated Community Residents• Vocational Rehabilitation Referral• Ex-Felons• Supplemental Security Income Recipients• Summer Youth

How Is The Credit DeterminedEmployers generally can earn a tax credit equal to 25% or 40% of a new employee's first-year wages, up to the maximum for the target group to which the employee belongs.

•25% for working 120 hours•40% for working 400 hours

Veteran Target GroupsReceiving SNAP (food stamps)Benefits $2,400

Disabled Veteran - Hired within 1 Year of Leaving Service $4,800

Disabled Veteran - Unemployed 6 Months $9,600

Unemployed Veteran (4 Weeks) $2,400

Unemployed Veteran(6 Months) $5,600

Other Target GroupsShort-Term TANF Recipient $2,400Long-Term TANF Recipient $9,000 (over 2 years)SNAP (food stamp) Recipient $2,400Designated Community Resident $2,400

Vocational Rehab Referral $2,400Ex-Felon $2,400SSI Recipient $2,400Summer Youth Employee $2,400

Tax Exempt Organizations (501C)

Credit = 16.25% of qualified 1st year wages for at least 120 hours of service

Credit = 26% of qualified 1st year wages for at least 400 hours of service

(Credit goes against payroll taxes.)

Applying for the CreditTo request a tax credit for a potentially-eligible

individual, the employer must submit:IRS form 8850 and ETA Form 9061

Forms postmarked no later than 28 days after the start date

Note: Forms may be submitted electronically via CWDS www.cwds.state.pa.us

Employers can access forms through Commonwealth Workforce Development

System’s Help Center. https://www.cwds.state.pa.us

Click on this icon which is located in the upper right hand corner

Look under “List of Miscellaneous Documents”

Tax Credit Forms

Employers may also contact: PA CareerLink® Offices Offices of Vocational Rehabilitation (OVR) County Assistance Office’s Tax Credit Services @ 1-800-345-2555 or RA-BWDP-TAXCREDITS@pa.gov

Tax Credit Forms

Employers mail completed forms to:

Department of Labor & IndustryTax Credit Services

651 Boas Street, 12th floorHarrisburg, PA 17121

Tax Credit Services Address

Federal Bonding Program

Program Objective

In 1966 the U.S. Department of Laborestablished The Federal Bonding Program

to provide Fidelity Bonds that guaranteehonesty for “at-risk”, hard-to-place job

seekers.

Program Highlights

No cost to the applicant or employer No paperwork to complete No waiting - Bond issued immediately No deductible Bond is good for 6 months @ $5,000.00

Qualifications

Anyone with a barrier to employment. Any employee who requires bonding

to stay employed due to a promotion with increased monetary responsibilities.

Program Restrictions

Must be of legal working age in PA. Must pay federal taxes through payroll

deduction. Must remain on the job for a minimum

of 6 months. Self-Employed individuals are ineligible.

Bond Issue Process

1) Employer contacts the State Bonding Coordinator (SBC) on the new employees first day of work.

2) SBC sends confirmation letter to employer. 3) Fidelity Bond is mailed to the employer within

2 weeks.

Contact Information

State Bonding Coordinator (717) 783-3676

Federal Bond Website www.bonds4jobs.com

Tax Credits and Bonding

Contact Information

Greg Shirk Tax Credit Services

(717) 783-3676 | gshirk@pa.gov

RA-BWDP-TAXCREDITS@pa.gov