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Tax credits save employers money, help job seekers

Airport Jobs e-UPDATE, July 18, 2003
Employers need only to fill out and mail in two forms to be eligible for the tax credit.

One of the simplest and easiest-to-use federal programs in the nation could provide thousands of dollars in tax credits to your company. The Work Opportunity Tax Credit (WOTC) and Welfare to Work (WtW) tax credit offer incentives for employers to hire job seekers who traditionally face significant barriers to employment. To date, the programs have provided millions of dollars in tax credits to thousands of Washington employers.

Judy Ok (pronounced “oak”) coordinates the WOTC and WtW tax credit programs at the Washington State Employment Security Department. Says Ok, “These credits are not rocket science. If an employer has been through the process once, it is simple, easy, and takes less than 10 minutes per new employee to complete.”

Ok is not the only one who is enthusiastic about the program. HMS Host and Doubletree estimate that 1 out of 10 of their existing job applicants already qualify them for a credit. The financial benefits provided by the tax credits are such that some companies have even developed incentive systems to encourage their recruiting staff to pre-screen applicants and new hires for tax credit eligibility.

About the credits - and how to obtain them
The Work Opportunity Tax Credit (WOTC) is a federal income tax credit that can save employers up to $2,400 each time they hire someone who is a member of one of eight targeted groups that have traditionally faced significant barriers to employment. Specific qualifications vary - applicants who may qualify their employer for a tax credit include:
  • Welfare recipients
  • Veterans
  • Residents of a federally designated “Enterprise Community” (in Seattle), or “Renewal Community” (in Tacoma)
  • Disabled persons
  • Food stamp recipients
  • Supplemental Security Income recipients
The Welfare to Work (WtW) tax credit is also a federal income tax credit. It can save employers up to $8,500 over a two-year period when they hire long-term welfare recipients. As with the WOTC, specific qualifications vary, but in general new hires who have received Temporary Assistance to Needy Families (TANF) for at least 18 consecutive months make their employer eligible for the credit.

Participation in either program is voluntary, and employees are not required to provide the information required for the employer to claim the credits. Employers should first determine whether the applicant is willing to provide the information necessary for the company to apply for the credit. There are two forms to be completed and mailed to the Employment Security Department WOTC Administrative Unit within 21 days of the employee’s start of work. Eligible employers will receive a certificate from Washington State to be submitted with their annual federal tax return when claiming the credit.

Third-party providers can help
Larger companies sometimes develop a specialized corporate function to manage the credit application process, or use a third party provider to qualify and process claims for the credits. There are seven or eight such providers in the nation, and while they tend to work with labor-intensive employers (at least 100 hires per year), the two providers contacted by Airport Jobs staff both indicated their willingness to consult with and help smaller companies as well.

A few of the third-party providers already used by airport employers are:
More information and training available
A training session designed to help smaller employers take advantage of the tax incentives will be presented by Judy Ok (Program Coordinator, Employment Security Department WOTC Unit) at 11 a.m. on October 23. Contact Ruth Westerbeck, Program Manager of Airport Jobs, at 206-835-7506 for details or to register. Employers can also learn more about how to obtain the credits at the WorkSource Washington website: http://www.wa.gov/esd/work/foremployers/wotc.htm. The Washington State Employment Security Department WOTC Unit information line is 800-669-9271.

Judy can be reached directly at 360-407-5249 or jok@esd.wa.gov to answer questions about the programs or set up another time to present the process and forms to employers.

Employer partners:
Peruse the list of airport employers listing their employment opportunities with Airport Jobs.
Trends in traffic:
Take a look at the weekly number of job seekers seeing your employment listings last month within a little historical context.
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