States regularly rely on tax incentives to spur job growth and retention. Many offer tax credits for hiring employees using criteria like those that qualify workers for the federal WOTC.
Many states offer Point-of-Hire (POH) Employment Tax Credits that use criteria similar to the WOTC’s hiring requirements.
State POH credits can range from a few hundred dollars, up to $20,000 per qualifying employee.
The time frame for when an employer can claim the tax credit and the type of state taxes against which the claim can be made (income tax, sales tax, etc.) varies by state.
State credits are typically non-refundable, meaning the business must have a tax liability against which to use the credit, however, not all states conform to this.
Eligibility to carry credits forward or back, for how long they can be carried, varies by state.
Work Opportunity Tax Credit (WOTC) grants tax credits towards an employer’s federal income tax liability. Credits range from $1,200 to $9,600 per qualified new hire, depending on the new hires’ WOTC target group.
Claiming ERC does not automatically subject a company to audit; however, some claims are likely to be reviewed. Understand who is at risk and what to do if you’ve already claimed.
Reach out to a tax consultant to learn how CTI powers your business for success.
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