TLDR: Yes…when you work with Arvo
If you’ve heard of the Work Opportunity Tax Credit (WOTC), you may already know that:
- >21% of Americans are eligible for WOTC
- Maximum credits per employee range from $1,200 to $9,600
- Surplus WOTC credits can be carried forward or backward across tax years
However, you may be asking yourself if the cost of participating in WOTC is worth it.
In this blog, we’ll break down some of WOTC’s biggest costs to help you determine the answer to that question.
Knowledge
Any time you integrate a new process within your organization, it requires an investment of time in order to learn how everything works. WOTC is no different. Originally enacted in 1996, its requirements and policies are articulated in federal tax legislation, and administered by government agencies, including the IRS and the Department of Labor.
Many free and/or online resources exist to teach you the ins and outs of WOTC. If you are like most people, however, determining which resources are worthwhile will require some investigation. What’s more is that many of these resources include disclaimers which advise you to consult with tax professionals before taking any action. Doing that requires even more time, and also possibly payment.
Despite these costs, once you acquire the necessary knowledge to design and implement a WOTC program, you’ll be on your way to a brighter tax future.
Screening
In order to claim WOTC credits, you must determine which newly hired employees are eligible–and you must do so on or before the day on which you extend a job offer.
For this reason, you should consider the costs of designing and implementing a reliable WOTC screening process for job applicants. Your screening process must be compliant with fair hiring and non-discrimination laws. Your objective should be to have all new job applicants completely, accurately, and voluntarily complete your screening process, without discouraging them from completing the rest of the application process.
Certification
After screening as eligible and accepting your job offer, WOTC employees must also be certified by your state or regional workforce agency. Gaining certification involves filing all required paperwork by the mandatory deadlines, complying with requests for additional documentation, and maintaining organized records of approvals, denials, and other documents.
The certification process can take months or, in some cases, more than a year. Processing times and procedures vary by state or territory. For these reasons, it is difficult to estimate exactly how much time and monetary cost you should expect to spend on certification, but it is not insignificant.
As gaining certification at high rates is key to maximizing your WOTC tax benefits, you should not cut corners on these costs.
Optimization
Because there is no total cap on the amount of WOTC credit you can earn, and because WOTC credits can be carried forward and backward across tax years, it is in your best interest to optimize your WOTC program to produce the highest possible rates of screening and certification. Achieving this requires continual monitoring, analysis, and problem solving.
The costs of optimization depend upon how many internal resources you can dedicate to the process. Optimizing your WOTC program requires a regular time investment. Some companies with large hiring volumes go as far as to assign a dedicated WOTC specialist to the task.
How Arvo helps
The benefits of a high-powered WOTC program extend beyond lowered tax liabilities. All things considered, WOTC employees are 408% more profitable for their employers than non-WOTC employees. Some companies see their bottom lines grow by up to 40%.
Arvo makes WOTC worth it by offering:
- Seamlessly integrated, proven screening tools
- Dedicated state workforce agency teams to handle certification
- Industry-leading dashboard for WOTC monitoring
- Tax experts ready for hands-on optimization
In short, we’ll handle your WOTC costs.
And, speaking of cost–we don’t charge you anything unless you earn credit.
Contact us today to get started.