Who hires people? You do. The business. As economic developers our job is to encourage you to do so. But how do we do that when most, if not all of the State incentives have either been eliminated or their future is tenuous as best? We have to look beyond the State to the Federal Government. But before you shake your head and laugh uncontrollably, let me tell you about an underutilized program you may have never heard of. The Workforce Opportunity Tax Credit (WOTC) “a Federal tax credit available to employers who hire and retain veterans and/or individuals from other target groups with significant barriers to employment”, can help you recover a large percentage of the salary paid to an employee for up to 2 years. As with anything, the actual amount you can claim depends on a number of different factors but an example on the Illinois Department of Employment Security (IDES) website states:
“For long-term Temporary Assistance for Needy Families (TANF) applicants, credit is available to employers who hire members of this group for up to a two-year period.
- In the first year, the employer may claim a tax credit equal to 40% of the first-year wages, up to the maximum tax credit, if the individual works at least 400 hours.
- In the second year, the employer may claim a tax credit equal to 50% of the second-year wages, up to the maximum tax credit, if the individual works at least 400 hours.”
Now you may be saying to yourself, this sounds great but the paperwork… NOT SO my friend. Fill out IRS Form 8850 and ETA Form 9061 and mail them in to IDES you are DONE. The IDES then forwards all of the information to the IRS and the IRS tracks everything through payroll. To make it even easier, many employers are automatically including the forms in hiring packets and letting IDES vet whether the employees qualify. It really doesn’t get much more simple than that.
By now, I hope I have piqued your interest. Have Questions? Check out more information on the WOTC Program or reach out to your local IDES office to learn more or join us at our May Lunch and Learn to hear reps from the Lake County Jobs Center and IDES talk about the programs first hand.