Finding good people to hire is one of the hardest tasks a business person does. Even when that task is done, what a lot of small business people don't realize is if those people also fit into one of fifteen categories - they could earn tax credits of $2,400 to $9,600 for each qualified individual hired from January 2015 through December 2019.
We are referring to The Work Opportunity Tax Credit Program. This federal tax credit is available to employers for hiring individuals from certain target groups who have consistently faced barriers to employment. These tax credits can significantly reduce a company's tax liability, allowing them to keep more of their hard-earned profits while providing access to good jobs for American workers.
Congress recently extended the Work Opportunity Tax Credit Program through 2019 for employers when they hire qualified individuals. Here is a list of the maximum amounts of tax credit that an employer can earn when they hire an individual from one of the following categories:
- An individual who was unemployed for more than 27 weeks and received unemployment compensation for part of that period - $2,400
- An individual ages 18 to 40 who lives in a designated county or census tract - $2,400
- An individual ages 18 to 40 who lives in a household that received Food Stamps (SNAP) - $2,400
- A veteran who was unemployed for more than 4 weeks but less than 6 months - $2,400
- A veteran who was unemployed for more than 6 months - $5,600
- A veteran and a resident of a household that received Food Stamps (SNAP) - $2,400
- A service disabled veteran - $4,800
- A service disabled veteran who was unemployed for more than 6 months - $9,600
- A resident of a household that received Temporary Assistance for Needy Families (TANF) for 9 months - $2400
- A resident of a household that received TANF for 18 months - $9,000
- An individual who is an ex-felon - $2,400
- An individual ages 18 to 65 who receives Social Security Disability Insurance (SSDI) and participates in the Social Security Administration's Ticket to Work Program - $2,400
- An individual who received Supplemental Security Income (SSI) - $2,400
- An individual who received Vocational Rehabilitation - $2,400
- An individual ages 16-17 living in a designated census tract, who is hired May 1- Sept 15 -$1,200
Many businesses are either missing out entirely or they aren't fully capitalizing on their tax credit potential. Here's some good news: 2016 is cued up to be an exceptional year to maximize these credits, and for a limited time, your business can also earn tax credits for each qualified employee who was hired in 2015.
So the Work Opportunity Tax Credit Program is really a win-win situation: More people are working, and businesses earn tax credits, which lowers their tax liability.