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Charter HR is now teaming with TALX in offering the Work Opportunity Tax Credit (WOTC) program to help you in reducing your federal income tax liability! The federal government enacted this program (on October 1, 1996) to promote the hiring of certain targeted demographic groups that may have challenges gaining employment (typically, individuals on welfare and/or using food stamps). Companies are always looking for innovative ways to reinvest in their workforce and the process is simple; so if you are examining ways to reduce federal and state income tax liability during these tough economic times, consider participating in the WOTC program. The federal tax credits currently range from $2,400 to $9,000 per employee, and this could provide beneficial tax relief for you as an employer. Charter HR submits information to TALX to get you started, and you will communicate directly with a TALX representative to establish your screening process.
When hiring employees, each potential employee must complete a screening process which includes: filling out the following forms - IRS Form 8850, Tax Credit Questionnaire (TCQ), and the Youth Self-Attestation Form (for applicants under age 25). The 8850 form and Youth Self-Attestation Form (if applicable) must be completed by the potential employee before they are offered the job or on the day they are offered a job. The TCQ may be completed at any point during the hiring process but no later than the first day of work. You as the employer must complete the "Employer Section" at the top of the TCQ form (job offer date and job start date); this information is critical to timely filing with the state WOTC offices (if the employee is potentially eligible as a tax credit). Review the forms to make sure they are completed and signed by the employee, then mail ORIGINALS to TALX for processing. If an employee refuses to complete or sign the forms (after you have explained that the paperwork will not affect their employment opportunities or personal income taxes), simply write "REFUSED" at the top of each form and mail to TALX. The forms must be received by the Department of Labor within 28 days of the original hire date, so mailing to TALX on the employee's first day of work is important. If your location has a high volume of new hires, a weekly mailing to TALX would be helpful. To achieve maximum compliance and credits, avoid the following 3 mistakes: No Signature - No Credit / Not Original - No Credit / Late Form - No Credit.
Helpful tips from TALX to achieve high compliance and maximum credits include:

  • Complete each form
  • Sign each form
  • All forms submitted must be original. No photocopies are accepted
  • Clients must use the pre-printed (location specific) forms provided by TALX
  • All forms must be on separate pieces of paper (no double-siding)
  • Completed original forms should be mailed to TALX no later than the employee's first day of work ... this is to comply with the WOTC 28 day deadline
  • If an employee refuses to complete or sign the forms, write "REFUSED" at the top of each form and mail to TALX (include their name & social security number)
  • If an employee inquires about the WOTC screening, let them know that your company participates in federal and state incentive programs in an effort to minimize the cost of doing business. Stress to the employee that their responses to the questionnaire will in no way affect their employment opportunity and all responses are kept confidential
  • No Signatures - No Credit / Not Original - No Credit / Late Form - No Credit