As a business owner, you are always looking for ways to maximize your profits while minimizing expenses. One of the most effective ways to do this is to take advantage of tax credits offered by the government. The Work Opportunity Tax Credit (WOTC) is one such credit that can significantly reduce your tax liability, increasing your cash flow to help you achieve company initiatives.
To be able to maximize WOTC, it’s important for your WOTC vendor to not only work with the state workforce agency (SWA), but also have a team that has a relationship with the SWA. A vendor must submit WOTC eligible employees to the SWA who will either certify or deny the employee WOTC status.
So why is having a state workforce agency liaison team important?
The SWA manages and guides the certification requirements which can be complex so it’s important to ensure that you meet all the requirements. Many WOTC vendors don’t have a team that specifically focuses on working with the SWA which costs their clients credits. Here are 3 of the most common areas missed by WOTC vendors without a SWA liaison teams:
- Submitting the appropriate documentation – there are several target groups that require documentation to be submitted to gain certification status for your employee. One such example is the veteran’s category. Without the additional DD-214 documentation, you will not receive tax credits in this category which has the highest tax credit opportunity of up to $9,600 per eligible employee. Because many WOTC vendors don’t have a team to track down this documentation and share it with the SWA, companies miss out on tens of thousands of dollars each year.
- Errors in the submission process – There are times during the submission process to the state workforce agency portals that errors occur. When this happens, it’s up to your state liaison team to consistently check the state websites for errors with submissions. If this is left unchecked, the individuals with submission errors will not be counted as being submitted timely and will be disqualified from being WOTC eligible costing companies thousands if not tens of thousands of dollars.
- State Workforce Agency mistakes – SWA’s make mistakes within their certification process and will issue denials from time-to-time. A WOTC vendor’s state liaison team should be reviewing all denials looking for mistakes. At Arvo we have found that we are often helping state workforce agencies improve their processes when we find these mistakes by working closely with them. An example is one SWA was using the wrong date with ex-felons causing them to deny all ex-felon submissions. When we showed them their mistake, they were able to correct it in their system and denials converted into certifications helping our clients gain tens of thousands of dollars in tax credits.
Overall, to ensure you are receiving maximum WOTC credits it’s crucial that you select a WOTC vendor with a state liaison team that is working on your behalf. This will ensure that you are taking advantage of all of your WOTC opportunities, and nothing is being lost after submission. If you’re interested in learning more about how Arvo works with SWA’s or would like to discuss how Arvo can help you maximize your WOTC credit, please don’t hesitate to contact us.