Is Your WOTC Processor Losing You Money?

Is Your WOTC Processor Losing You Money? May 7, 2018Leave a comment
Gambling with your WOTC processor can lose you thousands of dollars.

With the Work Opportunity Tax Credit, you could be getting up to $9,600 back in tax credits for every qualified candidate you hire. Unfortunately, many companies are getting less than the maximum WOTC benefits available to them. In our experience at Efficient Business Solutions, we’ve found most companies could be getting an average of three times more from their WOTC compliance than their current processor is finding them.

So how do you know if your WOTC processing system is actually losing you money? While the best way is to contact us for an evaluation, here are some sure-fire signs you could be getting more back in WOTC tax benefits.

Your WOTC Processor is Pen & Paper

It’s a common misconception that the Work Opportunity Tax Credit requires hard copy forms in the filing process. While IRS Form 8850 used to require a hand-signed employee signature, electronic signature has been accepted since 2012. Considering that Form 8850 must be filled and signed by your new employee on or before their first workday, electronic WOTC processing can greatly improve your ability to capture relevant candidate information before the deadline runs out.

A completely electronic WOTC processing system also has the benefits of being able to electronically send finished forms in a timely manner. This greatly reduces the chances of missing the important 28 day deadline to get all certification forms into your State Workforce Agency. If either of the deadlines are missed, even if your new hire is qualified as a Work Opportunity Tax Credit candidate, you still can’t claim them for benefits during tax season.

Your WOTC Processor Isn’t Part of Your On-boarding Process

A WOTC processor that isn’t properly integrated with your new hire on-boarding increases the chance of losing qualified candidates through the cracks in your system. To be certified as a qualifying candidate, your new hires must answer the necessary WOTC identification questions and give their signature on or before their first day of work.

If your WOTC processor isn’t set up to collect that information as part of the new hire on-boarding process—or even as part of the interview process (all WOTC questions comply with federal non-discrimination ordinances)—you will have to get that information yourself. Though answering the WOTC qualification questions is always voluntary, not including them in your on-boarding process makes it much more likely that your new hire will decline to participate—or just forget to fill out the form.

Your WOTC Processor Doesn’t Auto-Fill Tax Forms

In high-turnover industries like quick service restaurants, retail, hospice and construction, around 20-40% of incoming hires are qualified WOTC candidates. To gain tax benefits for these hires, you have to collect their qualifying information, submit it in a timely manner, track their first year wages, and then submit documentation for each individual qualifying hire.

That’s a lot of paperwork.

If your WOTC processor or processing system isn’t automated, that means needing to re-input information multiple times for each qualifying WOTC hire. Your best option is to find a WOTC processor that not only collects qualifying hire’s relevant WOTC information automatically for you doing the on-boarding process, but also will store that information and use it to complete the relevant tax forms at the end of your year.

If you don’t know whether your WOTC processor is meeting these requirements, you don’t know for sure that you’re not losing money in WOTC tax benefits. To learn more about electronic WOTC processing services, reach out to us here at EBS. We’d be happy to talk to you about your options when it comes to saving your business money.

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