CMS’s Brian Kelly answers your questions about the Work Opportunity Tax Credit.
Today’s WOTC Wednesday question: How are the Work Opportunity Tax Credits Calculated?
CMS Responds: The Work Opportunity Tax Credit is calculated based on three different variables. First the employee has to qualify for one of the ten target groups. secondly they have to work enough hours and earn enough dollars to hit the minimums of the Work Opportunity Tax Credit.
There are TWO main benchmarks:
- The employee must work a minimum of 120 hours for you, as an employer, to receive a 25% tax credit of the first $6,000 in wages. Maximum would be $1,500 if it meets that threshold.
- The second benchmark is that the employee reaches 400 hours worked. You would then receive 40% tax credit of the first $6,000 in wages, which is $2,400.
There are some variations, depending on the target group. For example, Long Term TANF recipients would qualify for up to $9,000, taken over 2 years of employment.
AND the Veteran Target groups can go from $2,400 up to $9,600.
About Our WOTC Screening Services
- Why you should use CMS’s WOTC Tax Screening Service rather than doing it yourself.
- Get an idea of how much you could be saving by utilizing the Work Opportunity Tax Credit for your company, try our WOTC Calculator.
- Are you a CPA or tax service provider? Find out how you can become a strategic Business Partner.
Contact CMS Today to Start Saving!
In over 25 years of providing valuable WOTC Screening and Administration services we’ve saved millions for our customers. How much could you be saving?
Contact CMS today to start taking advantage. Call 800-517-9099, or click here to use our contact form to ask any questions.