COVID-19 has brought about a frightening situation for big and small companies. The lockdown imposed across the US has put an abrupt halt to many businesses. However, in these uncertain times, an increase in essential job opportunities has been seen. If you own a grocery shop or run a delivery service, you should look at the Work Opportunity Tax Credit (WOTC) to learn about ways to optimize your revenue.
The WOTC can help you save money and get you a competitive edge over other business owners in the same field. Here’s all you should know about it:
What is the Work Opportunity Tax Credit (WOTC)?
WOTC is a federal tax credited to employers who hire people from certain groups that face employment barriers. These groups include ex-felons, army veterans, long unemployed people, among others. One of the most attractive features of the WOTC is that there isn’t a limit to how many people you hire to claim the tax credit. A single individual can get you tax credits of about $9,600 per year.
This makes the WOTC better than tax reductions whereby you get a tax credit for a dollar as a dollar match. This means that if you owe $20,000 in taxes and your WOTC stands at $20,000 credit, you won’t have to pay a penny to the government that year!
How is it beneficial amid the COVID-19 pandemic?
While the entire world seems to be in a financial crisis owing to the COVID-10 outbreak, here’s why WOTC can be beneficial for you in these trying times:
The conjunction with the CARES Act
The Coronavirus Aid, Relief, and Economic Security Act was signed into law by President Donald Trump in March 2020. In the $2.2 trillion economic stimuli passed by the 116th US Congress, employers are encouraged to keep their employees on the payroll during the current global crisis.
This could get the employers 50% tax credits of up to $10,000 paid in wages by them. This Employee Retention Credit, along with the Work Opportunity Credit, can be your golden egg in these economically stringent times. By hiring people who meet the IRS requirements, you can ensure that your tax charges are minimal by the end of this year.
Besides tax credits, the WOTC can get you many benefits, including the perks of working with military veterans. If you’re looking for trusted and detailed consultation regarding the WOTC and R & D tax credit, reach out to us at The Darson Group.
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