Tax Credits Blog

WOTC Program Permanency

President Obama submitted his budget for 2014 in April this year, and with it he outlined his plan to cut funding for Social Security, univeral access to pre-kindergarten education for children, cuts to the defense budget, among other things. But, one proposal caught our eye:

"The Administration also continues its support of tax credits that will help employ veterans. The Returning Heroes Tax Credit, which provides up to $5,600 to employers, and the Wounded Warrior Tax Credit, which provides up to $9,600 to hire long-term unemployed veterans with service-connected disabilities, were recently extended for one more year in the American Taxpayer Relief Act of 2012. These credits are a part of the Work Opportunity Tax Credit (WOTC), which contains other categories targeted to hiring veterans. The Budget proposes to permanently extend the WOTC."

From the Budget of the United States Government, Fiscal Year 2014, as reported at  http://www.whitehouse.gov/omb/budget/Overview

Permanently extending WOTC would be a boon to all employers in this company and greatly increase hiring and the pace of American job creation. Of course, the budget has to go through the debate process and both the Senate and House of Representatives will undoubtedly have objections. But if WOTC becomes permanent, never will we have to go through a hiatus period like we did in 2012, and it seems like this administration wants to make it a priority.


New York Explains Backlog

From a letter from Russell J. Oliver, Bureau Chief, Division of Employment and Workforce Solutions, State of New York to Ken Brice of CFO Resources:


"As you [are] aware, we were unable to completely process WOTC applications during calendar year 2012 due to the lack of federal legislation. Once we received approval in January 2013, we immediately worked to decrease our Other states also experienced a backlog because of this situation. 


"Additionally, under IRS Notice 14-2013, temporary relief was granted to employers who did not file their applications during the hiatus. This notice lifted the 28 day timeliness requirement, as long as applications were filed by April 29, 2013, for any hires from January 1, 2012 through March 31, 2013. This relief created a large number of applications to be submitted, impacting our backlog. 


"In order to address the backlog, we have added additional staff and are looking into better automating our processes. We are hopeful that we will not experience a delay in federal authorizing legislation in the future. Providing the best services to our state's businesses is our goal. Even with delays outside our control, we will continue to work had to meet this goal."


So it seems like New York is finally getting on the ball with the WOTC applications that they have pending from us. Keep sending in those forms, and we'll keep getting you those credits.


California Plans Big Changes!

More News from the WOTC Planet!


California Governor Jerry Brown released his May budget revise today, revealing additional intentions for the State’s enterprise-zone program.

From page 68:

“The [enterprise zone] hiring credit will be refocused to specificareas with high unemployment and poverty rates. This credit will be available for the hiring of long-term unemployed workers, unemployed veterans, and people receiving public assistance. The Enterprise Zone sales tax program will be expanded to a statewide, upfront sales tax exemption for manufacturing or biotech research and development equipment purchases.”

This budget document does not specify how these changes might be accomplished. It is clear to me, however, that new legislation would be required because this vision of the program varies substantially from that outlined in current law.

In his 2011-2012 budget proposals, Governor Brown proposed the outright elimination of the enterprise zone program.  He was unsuccessful, however, at overcoming legislators’ opposition to  the program’s death.  Since that time, the California’s legislature has experience a significant change in its membership. Perhaps this time, Governor Brown will be more successful at effectuating these serious although less drastic changes.

Not mentioned in the budget revise are the other enterprise zone tax benefits such as the net operating loss carryover, net-interest deduction for lenders, the business expense deduction and preference points for bidders on certain kinds of state procurement contracts.

UPDATE:  After listening to the California State Assembly Budget Subcommittee  May 22nd hearing on the Governor’s Enterprise Zone proposal, it is crystal clear to all that the Governor intends to replace the Enterprise Zone hiring credit program.


As for the President's push to make the WOTC permanent, stay tuned. No info yet, but we hope soon!


Good News on the Horizon!

President Obama has included the permanent extensions of the Work Opportunity Tax Credits (WOTC) in his current budget.

He wants to add the veteran's category that he signed into law in November 2011 to the IRS Tax Code and, by default, add the other categories as well.

It appears to have a good chance of passing.

Keep your fingers crossed.


Ken Brice



There may be a pony in 2012 credits!

The IRS has issued a bulletin which allows companies to extend the 28 day window requirement to the end of April 2013. Which means that if you had someone who qualified under most of the categories (Veteran's is the exception) and you didn't make the 28 day window, you can still send it in.

What we're hoping is that this ruling will allow companies who did not have their employees fill out the 8850 to retroactively go back and have them fill out the forms and send them in by the end of April.

Not sure how that will all shake out but we're keeping our fingers crossed!


Ken Brice