This document discusses employer tax credit programs, including the federal Work Opportunity Tax Credit program. It provides an overview of the WOTC program, which offers tax credits to employers for hiring individuals from target groups facing employment barriers. Eligible new hires can be worth $2,400-$9,600 in tax credits. The document reviews the application process, eligible target groups, and HKP's services for administering WOTC claims and other tax credit programs.

1. Tax Credits
Employer Tax Credit Programs

2. Agenda
 Introduction of HKP and our services
 Explain available federal and state employment tax
credit programs
 Requirements to receive various credits
 HKP’s streamlined administration of the process and
online application platform
 Recap and Q&A session

3. HK Family of Companies

4. About the HK Family of Companies
 HKP is an affiliate of Honkamp Krueger & Co., P.C. (HK).
 HK was established in 1947 and is a Top 100 CPA and
business consulting firm in the U.S. and has been recognized
for its national and regional growth for six consecutive years by
Accounting Today (2016).
 Ranked as the 65th largest CPA firm in the U.S. out of 53,516

6. Experience & Knowledge
 Processing tax credits since 2003
 Recouped over $84 million in tax credits for
clients over the last five years
 Over 1,600 tax credit client locations in all 50 states
 Direct contacts with states
 Influential lobbying for WOTC

7. Federal Tax Credit Program
 Congress has authorized
billions in incentives to get
employees back to work and
to improve the economy.
 Many of these incentives go
unclaimed because businesses
don’t know about the credits or
do not have the tools or time to
maximize these benefits.

8. Work Opportunity Tax Program
(WOTC)
 WOTC is a federal tax credit available to employers for hiring
individuals from specific target groups who have consistently
faced significant barriers to employment.
 WOTC joins other workforce programs that incentivize
workplace diversity and facilitate access to good jobs for
American workers.
Source: Department of Labor Employment & Training Administration

9. WOTC Program
 Qualified new hires from identified target groups
are worth up to $2,400 in federal tax credits.
 Some qualified employees are worth
as much as $9,600 in credits.
Potential Federal Tax Credits
$2,400
$4,800
$5,600
$9,000 $9,600

10. Tax Benefits
 Credit not a deduction
 Credits can be carried back 1 year
and carried forward 20 years
20 YEARS1 YEAR

11. WOTC Target Groups
The Work Opportunity Tax Credit (WOTC) is a federal tax credit that reduces the federal tax
liability of private employers who hire from qualified employees within targeted groups.
Targeted Groups:
 Temporary Assistance to Needy Families recipients (TANF)
 Veterans/disabled veterans (Currently six different vet groups)
 Ex-felons
 Designated Community Residents (DCR) residing in an Empowerment Zone (EZ),
Enterprise Community (EC), Renewal Community (RC) or Rural Renewal County (RRC)
 Vocational rehabilitation agency referrals
 Summer Youth
 Food stamp recipients (SNAP)
 Supplemental Security Income recipients (SSI)
 Long-Term Family Assistance Recipients (LTFAR)
 Long-term unemployment

12. Long-Term Unemployment Recipient
New target group approved Jan. 1, 2016
Requirements for employee
 Unemployed 27 consecutive weeks or more
 Includes a period in which the individual was receiving
unemployment
Credit
 40% of employee’s 1st year of wages up to $6,000 ($2,400 credit)

13. Is WOTC a good fit for your
organization?
 Do you offer entry level jobs or pay around $12/hour
or less?
 Do you have high employee turnover?
 Do you have the internal resources to meet the 28-day
deadline for the WOTC credit?

14. Why HKP for Tax Credits?
We work with all industries.
Some of the most popular are:
 Casinos
 Call centers
 Convenience stores
 Distribution centers
 Franchises
 Health care
 Hospitality
 Manufacturing
 Restaurants/fast food chains
 Retail
 Staffing

15. How to calculate the WOTC
Credit calculates using
Hours % of qualified wages
0 – 119 0%
120 – 399 25%
400+ 40%

16. How to estimate WOTC example
100 employee company with 100% turnover
15% of employees typically qualify for credits
$1,000 conservative tax credit amount
100 X 15% = 15 employees that may qualify for tax credits
15 x $1,000 = $15,000

17. Application Process
IRS Form 8850
This form must be used for the WOTC program. Both pages must be completed.

18. Application Process
Individual Characteristic Form (ETA-9061)
This form must be used for the WOTC program. Both pages must be completed.

19. Application Process
Long Term Unemployment Recipient Self – Attestation Form 9175
This form must be used to apply for Long Term Unemployment Target Group.

20. Online WOTC forms
 HKP offers an online forms solution for the WOTC program.
 This paperless process saves additional time and money.
 Employers also have access to:
– Reports
– Invoices
– Employee forms
 No additional cost for
administering the program
online.
 Bilingual option for English
and Spanish.

21. Feedback from our clients
“A huge timesaver because we
only have to worry about forms
that qualify.”
Staffing client in North Carolina
“Straight forward
and easy to use.”
Staffing client in Utah
“Very well thought out
and easy to use.”
Pharmaceutical client in Missouri
“Greener
alternative.”
Staffing client in Washington
“Great way to get paper out of the stores.”
Franchise client in Iowa

22. WOTC Process
 Every new hire completes the three forms: 8850, 9061 and 9175.
 All forms are mailed to HKP on a weekly basis or submitted online
to comply with the required 28-day processing period.
 All forms are tracked and reviewed to determine qualified employees.
 All qualified forms are submitted to their respective state to obtain
an approved certificate.
 HKP sends a monthly compliance report sharing the results of forms
received.
 Certificates come back to HKP with confirmation of approval or denial.
 Hours and wages for qualified employees are collected quarterly.
 HKP processes credits quarterly and delivers a credit summary
detailing credits for each certified employee.

23. Claiming WOTC

24. What’s new in WOTC?
 States develop their own systems
for electronic submission
 37 states accepting electronic
submission of WOTC forms
 Approval process
significantly faster
(60 days vs. 12 months)
 Reduced mail expenses
 Valid electronic signatures
Alabama
Alaska
Arizona
Arkansas
California
Colorado
Florida
Georgia
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Nebraska
New Jersey
New Mexico
North Carolina
North Dakota
Ohio
Oklahoma
Oregon
Pennsylvania
South Carolina
Tennessee
Texas
Utah
Virginia
Washington
Washington, D.C
West Virginia

25. Empowerment Zone Credits
 Stimulates economic development in distressed areas
 Similar to the “DCR” target group within WOTC
 Employee must live and work within the designated
federal zone
 Up to $3,000 per employee available per year

26. Urban Empowerment Zones
 Pulaski County, AR
 Tucson, AZ
 Fresno, CA
 Los Angeles, CA
 Santa Ana, CA
 New Haven, CT
 Jacksonville, FL
 Miami/Dade County, FL
 Chicago, IL
 Gary/Hammond/E Chicago, IN
 Boston, MA
 Baltimore, MD
 Detroit, MI
 Minneapolis, MN
 St. Louis, MO/East St. Louis, IL
 Cumberland County, NJ
 New York, NY
 Syracuse, NY
 Younkers, NY
 Cincinnati, OH
 Cleveland, OH
 Columbus, OH
 Oklahoma City, OK
 Philadelphia, PA/Camden, NJ
 Columbia/Sumter, SC
 Knoxville, TN
 El Paso, TX
 San Antonio, TX
 Norfolk/Portsmouth, VA
 Huntington, WV/Ironton, OH

27. Rural Empowerment Zones
CA - Desert Communities (East of LA)
GA - Southwest Georgia United (SW GA)
IL - Southernmost Illinois Delta (Southern IL)
KY - Kentucky Highlands (Central & South Central KY)
ME - Aroostook County (NE Maine)
MS - Mid-Delta EZ Alliance (West Central MS)
ND - Griggs-Steele (Eastern ND)
SD - Oglala Sioux Tribe (SW SD)
TX - FUTURO (Southern TX)
TX - Rio Grande Valley (Southern TX)

28. State Tax Credits
 Some states have tax credits parallel to WOTC.
 State credits are frequently based on a business
relocation, expansion or starting a business within
a designated zone.
 Often need to apply for credits before a project begins.
It is crucial to be proactive.

29. Recap
 WOTC was created for many industries and has a
proven history of success.
 HKP has highly regarded customer service with accurate
and timely reporting.
 Our streamlined platform is very simple to administer on
our clients’ end.
 HKP can offer many additional services and truly take a
lot off your plate.

31. Contact Information
taxcredits@hkpayroll.com
(888) 556-0123