TWC identifies federal tax credits for Texas employers

AUSTIN, Texas – State employers continue to have the opportunity to save hundreds of millions of dollars with the reauthorization of the Work Opportunity Tax Credit (WOTC) through August 31, 2011. In Fiscal Year 2007, the Texas Workforce Commission (TWC) assisted businesses by identifying $188 million in potential tax savings, which are available to employers that hire job seekers from qualified targeted populations.

“Not only can the Work Opportunity Tax Credit help employers’ bottom line, but it also can help boost Texas’ economy by providing jobs for the workers of Texas,” said Commissioner Ron Lehman, who represents employers for TWC. “Because employers file with TWC for the credit throughout the year, this valuable credit represents one of the easiest ways for qualifying businesses to realize federal tax savings.”

WOTC is a credit of up to $2,400 per qualifying employee. It is designed to encourage employers to hire new employees from nine targeted groups of qualified job seekers who may face barriers to employment, including:

• Temporary Assistance for Needy Families (TANF) recipients

• Veterans

• Ex-offenders

• Designated community residents

• Vocational rehabilitation referrals

• Summer youth

• Food stamp recipients

• Supplemental Security Income (SSI) benefits recipients

• Qualified Long-term Family Assistance recipients

Employers who hire qualified disabled U.S. military veterans may receive up to $4,800 in tax credits under a new subgroup that includes disabled veterans who are entitled to compensation for military service-related disabilities.

Long-term Family Assistance recipients must have entered employment after December 31, 2006, and before September 1, 2011, to enable employers to be eligible for up to $9,000 per employee in tax credits when they who hire from families who have received long-term TANF benefits.

Although nearly $188 million in qualified tax savings for FY 2007 is significant, only 2.3 percent of Texas’ more than 500,000 employers took advantage of WOTC. Millions in tax credits are available to employers that didn’t seek to hire from the qualifying job seeker groups and file for WOTC. To help employers recognize WOTC-qualified job applicants, TWC mails conditional certifications to job seekers, who then can take the forms to job interviews. They can show employers they have the opportunity for potential tax savings if the job seekers are hired and are in one of the nine qualifying targeted groups.

Applications for the credits can be submitted year-round to TWC’s WOTC Unit for certification. Employers must mail the forms to the unit within 28 days of a qualifying worker’s employment start date.

Employers seeking more information about WOTC, forms and TWC’s WOTC Employer Packet may visit www.texasworkforce.org or call TWC’s WOTC Unit at 1-800-695-6879. Information also is available at www.irs.gov.

The Texas Workforce Commission is a state agency dedicated to helping Texas employers, workers and communities prosper economically. For details on TWC and the services it offers in unison with its network of local workforce development boards, call (512) 463-8556.

Click here to view the TWC Press Release.