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The Work Opportunity Tax Credit, or WOTC, gives employers a tax reason to hire people who’ve had a hard time finding work.
But like most tax matters, the WOTC comes with deadlines. One of those is fast approaching.
The due date for some companies that hired qualifying workers in 2015 and the first 8 months of this year is Wednesday, Sept. 28.
Special one-time deadline
Employers who have hired workers covered under one of the Work Opportunity Tax Credit’s employee categories must get those workers certified by the Internal Revenue Service. That’s the first step.
Once the tax agency certifies that a company has hired individuals who meet WOTC requirements, the business then can claim the WOTC on its income tax return.
But without first getting that official IRS imprimatur, the company can’t claim the WOTC.
Normally, that tax credit certification request by filing Form 8850 is required within 28 days after the eligible employee begins work.
But since Congress delayed extending the WOTC and its provisions were made retroactive, a new one-time deadline was created.
The IRS now is giving qualifying employers until Sept. 28 to file certification requests for eligible workers they hired any time in 2015 and during the first eight months of 2016.
Qualifying worker categories
The WOTC typically gets a lot of attention because it offers a tax break to companies that hire unemployed veterans, including disabled former members of the military.
But the renewal of the WOTC also now provides businesses a tax break when they put people on their payrolls who previously were out of work for at least 27 weeks and received state or federal unemployment benefits during part or all of that time.
The other categories of WOTC-eligible workers include:
- Some recipients of Temporary Assistance for Needy Families, or TANF, benefits.
- Former felons.
- Designated community residents living in Empowerment Zones or Rural Renewal Counties.
- Vocational rehabilitation referrals.
- Summer youth employees living in Empowerment Zones.
- Long-term family assistance recipients.
- Supplemental Security Income, or SSI, recipients.
- Recipients of food stamps, known as Supplemental Nutrition Assistance Program, or SNAP.
Hiring tax help
Hiring employees is one of the most critical, and often one of the most risky, tasks a business takes.
But if your company is willing to take a chance on a person who is in a special category that sometimes makes it hard to find work, Uncle Sam thanks you, both figuratively and literally with the WOTC.
Make sure you don’t miss his indication of gratitude and file for qualifying WOTC worker certification by Sept. 28.
Paul S. Herman CPA, a tax expert for individuals and businesses, is the founder of Herman & Company, CPA’s PC in White Plains, New York. He provides guidance and strategies to improve clients’ financial well-being.
I recently had the pleasure of speaking with PGA Pro Michael Heisterkamp. Mike has been the head golf pro at Chagrin Valley Country Club in Chagrin Falls, OH for the past 22 years. He seems to have cracked the member retention code.
Mike Heisterkamp’s job is to run a golf program. But his mission is to attract and retain members for his club.
Mike started with his own belief system as to what is important in doing his job well. He then looked to other pros around the country and found that the most successful pros interacted regularly with their members.
Through some study and analysis, Mike discovered that every member who has done at least one of the following three things in the past few years has stayed at the club:
- Played a round with the pro
- Taken at least three lessons in a year
- Gone on a golf trip with the pro
Like all good head pros, Mike interacts with members and guests regularly: playing, meeting and greeting. But behind his casual and friendly demeanor is a system.
He tracks member activity methodically. For each member he knows: number and dates of lessons, golf shop purchases, and number of tournaments and golf trips.
He also stays in touch with the club membership office to learn which members have resigned and who has joined the club. Then he matches that info to his activity tracking system.
Playing with the Pro
Mike runs a season-long “play-with-the-pro” tournament. He plays with many members during the course of the tournament and plays with some members multiple times.
He keeps a large scoreboard in the locker room to encourage participation and maintain enthusiasm. At the end of the season, he runs a shoot-out for the top three teams.
Mike finds that if a member takes three or more lessons a year, that member stays with the club. He tracks the lessons that each member takes and, without being pushy, encourages certain members to take more lessons.
At the same time, Mike and his assistants regularly are on the driving range giving members free tips. This shows members that the pros care. It also encourages members to take more lessons.
Mike runs a golf trip each year for about 15 members. On the even years, the trip is in the US and runs for four or five days. In the odd years, it’s a 10-day international trip.
Through his network of golf professionals, Mike gets his members on some of the top courses in the US and Europe. Sign me up!
Mike sends out an email invitation to the entire membership for each trip a year in advance. The trips are so popular that they are usually filled within a week of Mike’s email.
Mike tries to avoid having the same members on the trip year after year. He aims to mix up the group by having no more than half of the previous trip’s group on the next trip.
Mike goes out of his way to make non-members feel welcome at the club. When a member brings a guest to play, Mike makes it his business to know when the guest is coming and his or her name so that he can greet and welcome the guest by name.
He also regularly plays with prospective members. He says that in the past few years 11 out of 12 candidates for membership who played with him subsequently joined the club.
That’s a .917 batting average. Awesome!
Membership is Job One
Mike recognizes that maintaining the Club’s membership is not just the Membership Committee’s job. It’s his job, too.
The head golf pro plays an important role in providing a great member experience. That’s why members join and stay.
But Mike wouldn’t be as effective as he is without a system. He has devised one that works.
It allows him to contribute in a meaningful way to his club’s well-being, increase his value to the club and hopefully increase his compensation.
I am sure it also increases his attractiveness to other clubs looking to hire a new pro. Mike’s systemized approach is something all head pros should consider.
Moving to Boynton Beach Offers Premium Tax Benefits
Imagine having year-round access to miles of sandy beaches, championship golf courses and waterfront parks, not to mention great weather. Sound too good to be true? Not if you live in Boynton Beach, Florida. Boynton Beach is a mid-size community located in Palm Beach County. Best of all, residents receive all the great tax benefits that Florida has to offer. This helps to make setting up a residency near the beach very affordable.
Florida Tax Benefits
Florida is one of the few states in America that does not have a state income tax. While you will still have to pay federal income tax, you won’t pay state income tax on your Florida wages, pension or social security benefits.
Another cost savings benefit Floridians receive is no inheritance tax. The Florida State Constitution bans this type of separate taxation, so you will never have to worry about state death tax whether you are planning to inherit an estate someday or leave assets behind for your loved ones.
Florida has what is referred to as a “homestead exemption.” This exempts homeowners from paying property taxes on the first $50,000 value of their property. You must apply for this exemption in order to obtain this special benefit.
According to the Pension Source Tax Act of 1996, it is illegal for another state to try to levy their taxes on you if you live in Florida but receive a pension from another state. However, it is crucial to establish an official residency in Florida. If you do not set up your residency properly, you risk having another state trying to levy their taxes on you. This is especially true if you have a dual residency with another state.
Here are several things you can do to establish residency and ensure you get all the tax benefits you deserve.
Obtain a Florida driver’s license and vehicle registration.
Register to vote in Palm Beach County.
Apply for the Homestead Exemption (if you own property in Florida).
Establish a bank account in Florida and change your direct deposits to this account.
File federal income tax using a Florida address.
Make sure you are physically present in the state for at least 183 days.
File a domicile with the Palm Beach County Clerk of Courts and submit a copy to your previous county tax office.
Herman & Company CPA’s, P.C. can help answer any questions you have about establishing residency in Boynton Beach, Florida. Our team of financial professionals can assist you with everything from tax planning and preparation to estate and retirement planning. We not only will help you save money by minimizing your tax burden, but we will provide professional advice to help you plan for your future.
Any U.S. tax advice contained in the body of this website is not intended or written to be used, and cannot be used, by the recipient for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code or applicable state or local tax law provisions.