Understanding and Utilizing Work Opportunity Tax Credits
If you run any type of business entity, then, assuming it’s not a nonprofit, you’re always trying to reduce operating costs to maximize returns.
13:39 26 January 2021
There are creative but legal ways to do that. Some business owners become masters of operating cost reduction.
You should always take advantage of tax credits if you can. They are in place for a reason, and reducing the taxes you pay is a viable operating cost reduction strategy.
With that in mind, let’s talk about work opportunity tax credits. If you don’t know about this program yet, it’s time to learn. It can help your business tremendously.
Work Opportunity and Point of Hire Tax Credits
The federal government came up with the Work Opportunity Tax Credit program. It’s available to an employer if you elect to hire individuals that belong to particular targeted groups. These groups generally have faced employment barriers in the past.
You might be tax credit-eligible if you hire veterans, ex-felons, and others. You need to look at the parameters to see how you can benefit from the credit. There are websites you can visit which will outline the program details.
As you hire these individuals, you can also look into point of hire tax credits. These are credits that you can start to enjoy as soon as you hire an individual through the Work Opportunity Tax Credit program. If you’re attempting to get these benefits as quickly as possible, this is how you do that.
Finding a Comprehensive Tax Credit Solution
The one thing you should realize about these tax credit programs is that they can get more than a little confusing. If you don’t have any experience with them, and you’re trying to navigate the whole process, you can find yourself up to your neck in paperwork very quickly.
It’s most likely your HR department that will have to deal with this. You want those credits because it will help you out when tax time rolls around, but you also don’t want to overwork your HR staff. If you’re a smaller company, that might be just one or two people, and they probably have plenty to do already.
There are potential solutions that exist, though. One thing you might do is get a software program that can help your HR department file tax credit claims. There are several that exist now, and if you can find one you can afford that also has the tools you need, there’s no reason not to purchase it.
What Can Such a Program Do?
The right software suite can be a centralized digital location where your HR department keeps track of not just point of hire tax credits but also any additional credits you’re trying to claim. If your company makes all of this digital, you won’t need a physical claims repository.
You can administer an employee questionnaire when you do your hiring. Based on their answers, the software suite can determine whether you might be tax credit-eligible.
The software can also help you with applicant tracking, the onboarding program that each new employee undertakes, and it can help you with payroll as well. You want an intuitive software suite, so the HR department can pick it up quickly. If you buy one that’s too complex or convoluted, it can be detrimental rather than an asset.
Simplify the Whole Process
Having a software suite that can handle all this for you can be a load off your shoulders. As the company CEO, or whatever your official job title is, you have other things about which to worry, like expanding within your niche, finding funds for various projects, your marketing campaigns, and more. Any time that you can automate anything, it’s probably in your best interest to do it.
Also, you want to support the Work Opportunity Tax Credit program and keep it going. This is an excellent program since it can help traditionally marginalized individuals find work. If not for programs like this, they might remain unemployed indefinitely, or they’ll have to take jobs for which they are overqualified.
You can start checking out a few of the different software suites that exist without delay. There are some that handle tax credit filing, but lots more as well. You might find one that can also handle employment verification, unemployment tax planning, human resource analytics, cybersecurity, etc.
These software suites can revolutionize your company, and your HR department will love that you’re making their jobs so much easier.