The Work Opportunity Tax Credit (WOTC) for home care

Transcription

1 The Work Opportunity Tax Credit (WOTC) for home care Derek Jones ClearCare Online Thank You To Our Session Sponsor, ClearCare! Stop By Booth #213! 1

2 Download this presentation Tool This Presentation: May 10-12, 2016 CAHSAH 50th Anniversary Annual Conference 3 About Me Originally a Botany Research Scientist Lead Marketing and Agency Education at ClearCare Online, San Francisco Previously VP Marketing for a private-duty national franchise brand with 200+ locations Managed a 700 client regional private-duty agency in Pennsylvania Launched 50 new offices with <10% failure May 10-12, 2016 CAHSAH 50th Anniversary Annual Conference 4 2

3 About ClearCare May 10-12, 2016 CAHSAH 50th Anniversary Annual Conference 5 Tool May 10-12, 2016 CAHSAH 50th Anniversary Annual Conference 6 3

4 Technology is changing our industry has changed May 10-12, 2016 CAHSAH 50th Anniversary Annual Conference 7 New, technology-focused entrants promise innovative models Client First New Tech First Entrants $20 million financing April 2015 $23 million financing June 2015 May 10-12, 2016 CAHSAH 50th Anniversary Annual Conference 8 4

5 May 10-12, 2016 CAHSAH 50th Anniversary Annual Conference 9 May 10-12, 2016 CAHSAH 50th Anniversary Annual Conference 10 5

6 May 10-12, 2016 CAHSAH 50th Anniversary Annual Conference 11 May 10-12, 2016 CAHSAH 50th Anniversary Annual Conference 12 6

7 The Tech Entrant Playbook Market share first, profit margins second Success in 1 geo-metro results in larger rounds of capital Put profit margin pressure on incumbent client first agencies (you) Lock-up and command the supply of caregivers May 10-12, 2016 CAHSAH 50th Anniversary Annual Conference 13 The Good News You can punch back! May 10-12, 2016 CAHSAH 50th Anniversary Annual Conference 14 7

8 WOTC The Work Opportunity Tax Credit (WOTC) is a Federal tax credit available to employers who hire individuals from eligible target groups with significant barriers to employment. WOTC can reduce an employer s effective tax rate via a tax credit There is no limit on the number of employees submitted Credit is based on how many hours worked and how much they are paid May 10-12, 2016 CAHSAH 50th Anniversary Annual Conference 15 WOTC Understanding How familiar are you with the Work Opportunity Tax Credits Program? Does your agency participate in the WOTC Program? May 10-12, 2016 CAHSAH 50th Anniversary Annual Conference 16 8

9 Steps of the Program 20% of wages up to max benefit 40% of wages up to max benefit Work 400 hours? Submit on taxes Work 120 hours? Qualified Criteria? Complete on date of hire & submit within 28-days? May 10-12, 2016 CAHSAH 50th Anniversary Annual Conference 17 Steps of the Program Qualifying Veteran Category Max Tax Credit Benefit Other Qualifying Categories Max Tax Credit Benefit Veteran: SNAP (food stamps) $2,400 Veteran: Service connected disability, $4,800 hired one year from leaving service Veteran: Service connected disability, Unemployed at least 6 months $9,600 Veteran: Unemployed at least 4 weeks $2,400 Veteran: Unemployed at least 6 months $5,600 Short-Term TANF Recipient $2,400 Long-Term TANF Recipient (> 2 yrs) $9,000 SNAP (food stamp) recipient $2,400 Designated Community Resident $2,400 Vocational Rehabilitation Referral $2,400 Ex-Felon $2,400 Supplemental Security Income Recipient $2,400 Summer Youth $1,200 TOOL What are the most common qualified employees? May 10-12, 2016 CAHSAH 50th Anniversary Annual Conference 18 9

10 How is the credit calculated? 1. Does the caregiver meet one of the eligible WOTC employee categories? 2. If yes, how many hours has employee worked from their start date? Typical Scenario - Must work a minimum of 120 hours hours worked = 25% of wage up to the maximum benefit - >400 hours, 40% of wage up to maximum benefit EXAMPLE: Unemployed Veteran with service-connected disability - $12 / hour earned hours x $12 = $4,800 waged earned - Tax credit = $1,920 if retained for the whole year 2,000 hours, tax credit = maximum benefit of $9,600 ($12 x 2,000 hours x 40%) May 10-12, 2016 CAHSAH 50th Anniversary Annual Conference 19 How is the credit calculated? Typical Agency: 50 caregivers 15-20% qualify $1,800 is the average for health care EXAMPLE: 50 caregivers x 17.5% = 9 eligible employees x $1,800 avg credit = $16,000 tax credit May 10-12, 2016 CAHSAH 50th Anniversary Annual Conference 20 10

11 How do I file? Form 8850 Pre-Screening Notice and Certification Request for the Work Opportunity Credit Employers use this form to pre-screen and to make a written request to their state workforce agency (SWA) to certify an individual as a member of a targeted group for purposes of qualifying for the work opportunity credit. Form 9061 Individual Characteristics Form Form 9062 Conditional Certification Form 5884 Tax reporting form used to report WOTC with tax return May 10-12, 2016 CAHSAH 50th Anniversary Annual Conference 21 How do I file? 8850 Form Signed/Sent to GIS Applicant receives IRS Form 8850 on or before 1 st day at work 8850 Rec d/gis generates 9061, mails to govt. GIS is updated with govt. agency response/ status WOTC certificate stored Client is informed of Status May 10-12, 2016 CAHSAH 50th Anniversary Annual Conference 22 11

12 After submission, what next? Completed 8850, 9061 and all necessary documentation are submitted to the applicable state agency for review. State agency responds to confirm eligibility: Certification allows the credit to be calculated and taken for all qualified wages. Denial the state determines that the associate has not met the criteria to allow their employer to take the WOTC credit. Needs Letter the state is requesting additional information/documentation to be submitted for further consideration of the certification. Once the necessary information/documentation is received by the state the Certification process begins again. May 10-12, 2016 CAHSAH 50th Anniversary Annual Conference 23 UPDATES Long-Term Unemployment Recipients group. (27 months who collected unemployment) WOTC renewal through Dec 21 st, 2019 Lookback period approved until June 29 th, 2016 For Caregiver hires between 1/1/15 5/31/16 May 10-12, 2016 CAHSAH 50th Anniversary Annual Conference 24 12

13 FAQs Can I file for caregivers who are no longer employed? What if another agency has claimed the caregiver? How long do I have to meet the 120 hours? Can a caregiver qualify for >1 tax credit? May 10-12, 2016 CAHSAH 50th Anniversary Annual Conference 25 Session Sponsor Visit ClearCare at Booth # 213! CAHSAH 50th Anniversary Annual Conference 26 13

14 Speaker Information Derek Jones, CSA Sr. Director of Marketing ClearCare On line 650 Townsend St, San Fran CA, Phone Fax Please Make this be your Final Slide May 10-12, 2016 CAHSAH 50th Anniversary Annual Conference 28 14