Employer Tax Credit Programs

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Tax Credits

• Employer Tax Credit Programs

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Agenda

• Introduction of HKP and our services
• Explain available federal and state employment
  tax credit programs
• Requirements to receive various credits
• HKPs streamlined administration of the process
  and online application platform
• Recap and QA session

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HK Family of Companies
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About the HK Family of Companies

• HKP is an affiliate of Honkamp Krueger Co.,
  P.C. (HK).
• HK was established in 1947 and is a Top 100 CPA
  and business consulting firm in the U.S. and has
  been recognized for its national and regional
  growth for six consecutive years by Accounting
  Today (2016).
• Ranked as the 65th largest CPA firm in the U.S.
  out of 53,516

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Experience Knowledge

• Processing tax credits since 2003
• Recouped over 84 million in tax credits for
  clients over the last five years
• Over 1,600 tax credit client locations in all 50
  states
• Direct contacts with states
• Influential lobbying for WOTC

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Federal Tax Credit Program

• Congress has authorized billions in incentives to
  get employees back to work and to improve the
  economy.
• Many of these incentives go unclaimed because
  businesses dont know about the credits or do not
  have the tools or time to maximize these
  benefits.

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Work Opportunity Tax Program (WOTC)

• WOTC is a federal tax credit available to
  employers for hiring individuals from specific
  target groups who have consistently faced
  significant barriers to employment.
• WOTC joins other workforce programs that
  incentivize workplace diversity and facilitate
  access to good jobs for American workers.
• Source Department of Labor Employment
  Training Administration

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WOTC Program

• Qualified new hires from identified target groups
  are worth up to 2,400 in federal tax credits.
• Some qualified employees are worth as much as
  9,600 in credits.

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Tax Benefits

• Credit not a deduction
• Credits can be carried back 1 year and carried
  forward 20 years

20 YEARS
1 YEAR
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WOTC Target Groups

• The Work Opportunity Tax Credit (WOTC) is a
  federal tax credit that reduces the federal tax
  liability of private employers who hire from
  qualified employees within targeted groups.
• Targeted Groups
• Temporary Assistance to Needy Families recipients
  (TANF)
• Veterans/disabled veterans (Currently six
  different vet groups)
• Ex-felons
• Designated Community Residents (DCR) residing in
  an Empowerment Zone (EZ), Enterprise Community
  (EC), Renewal Community (RC) or Rural Renewal
  County (RRC)  
• Vocational rehabilitation agency referrals  
• Summer Youth
• Food stamp recipients (SNAP)
• Supplemental Security Income recipients (SSI)
• Long-Term Family Assistance Recipients (LTFAR)
• Long-term unemployment

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Long-Term Unemployment Recipient

• New target group approved Jan. 1, 2016
• Requirements for employee
• Unemployed 27 consecutive weeks or more
• Includes a period in which the individual was
  receiving unemployment
• Credit
• 40 of employees 1st year of wages up to 6,000
  (2,400 credit)

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• Is WOTC a good fit for your organization?
• Do you offer entry level jobs or pay around
  12/hour or less?
• Do you have high employee turnover?
• Do you have the internal resources to meet the
  28-day deadline for the WOTC credit?

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Why HKP for Tax Credits?

• We work with all industries.
• Some of the most popular are
• Casinos
• Call centers
• Convenience stores
• Distribution centers
• Franchises
• Health care
• Hospitality
• Manufacturing
• Restaurants/fast food chains
• Retail
• Staffing

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How to calculate the WOTC

• Credit calculates using

Hours of qualified wages
0 119 0
120 399 25
400 40
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How to estimate WOTC example

• 100 employee company with 100 turnover
• 15 of employees typically qualify for credits
• 1,000 conservative tax credit amount
• 100 X 15 15 employees that may qualify for
  tax credits
• 15 x 1,000 15,000

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Application Process

• IRS Form 8850
• This form must be used for the WOTC program. Both
  pages must be completed.

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Application Process

• Individual Characteristic Form (ETA-9061)
• 
  
• This form must be used for the WOTC program. Both
  pages must be completed.

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Application Process

• Long Term Unemployment Recipient Self
  Attestation Form 9175
• 
  
• This form must be used to apply for Long Term
  Unemployment Target Group.

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Online WOTC forms

• HKP offers an online forms solution for the WOTC
  program.
• This paperless process saves additional time and
  money.
• Employers also have access to
• Reports
• Invoices
• Employee forms
• No additional cost for administering the program
  online.
• Bilingual option for English and Spanish.

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Feedback from our clients
Straight forward and easy to use. Staffing
client in Utah

• A huge timesaver because we only have to worry
  about forms that qualify.
• Staffing client in North Carolina

Great way to get paper out of the
stores. Franchise client in Iowa
Greener alternative. Staffing client in
Washington
Very well thought out and easy to
use. Pharmaceutical client in Missouri
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WOTC Process

• Every new hire completes the three forms 8850,
  9061 and 9175.
• All forms are mailed to HKP on a weekly basis or
  submitted online to comply with the required
  28-day processing period.
• All forms are tracked and reviewed to determine
  qualified employees.
• All qualified forms are submitted to their
  respective state to obtain an approved
  certificate.
• HKP sends a monthly compliance report sharing the
  results of forms received.
• Certificates come back to HKP with confirmation
  of approval or denial.
• Hours and wages for qualified employees are
  collected quarterly.
• HKP processes credits quarterly and delivers a
  credit summary detailing credits for each
  certified employee.

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Claiming WOTC
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Whats new in WOTC?
Alabama Alaska Arizona Arkansas California Colorad
o Florida Georgia Illinois Indiana Iowa Kansas Ken
tucky Louisiana Maryland Massachusetts Michigan Mi
nnesota Mississippi
Missouri Nebraska New Jersey New Mexico North
Carolina North Dakota Ohio Oklahoma Oregon Pennsy
lvania South Carolina Tennessee Texas
Utah Virginia Washington Washington, D.C West
Virginia

• States develop their own systems for electronic
  submission
• 37 states accepting electronic submission of WOTC
  forms
• Approval process significantly faster (60 days
  vs. 12 months)
• Reduced mail expenses
• Valid electronic signatures

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Empowerment Zone Credits

• Stimulates economic development in distressed
  areas
• Similar to the DCR target group within WOTC
• Employee must live and work within the designated
  federal zone
• Up to 3,000 per employee available per year

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Urban Empowerment Zones

• Pulaski County, AR
• Tucson, AZ
• Fresno, CA
• Los Angeles, CA
• Santa Ana, CA
• New Haven, CT
• Jacksonville, FL
• Miami/Dade County, FL
• Chicago, IL
• Gary/Hammond/E Chicago, IN
• Boston, MA
• Baltimore, MD
• Detroit, MI
• Minneapolis, MN
• St. Louis, MO/East St. Louis, IL

• Cumberland County, NJ
• New York, NY
• Syracuse, NY
• Younkers, NY
• Cincinnati, OH
• Cleveland, OH
• Columbus, OH
• Oklahoma City, OK
• Philadelphia, PA/Camden, NJ
• Columbia/Sumter, SC
• Knoxville, TN
• El Paso, TX
• San Antonio, TX
• Norfolk/Portsmouth, VA
• Huntington, WV/Ironton, OH

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Rural Empowerment Zones
CA - Desert Communities (East of LA) GA
- Southwest Georgia United (SW GA) IL
- Southernmost Illinois Delta (Southern
IL) KY - Kentucky Highlands (Central South
Central KY) ME - Aroostook County (NE
Maine) MS - Mid-Delta EZ Alliance (West Central
MS) ND - Griggs-Steele (Eastern ND) SD - Oglala
Sioux Tribe (SW SD) TX - FUTURO (Southern
TX) TX - Rio Grande Valley (Southern TX)
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State Tax Credits

• Some states have tax credits parallel to WOTC.
• State credits are frequently based on a business
  relocation, expansion or starting a business
  within a designated zone.
• Often need to apply for credits before a project
  begins. It is crucial to be proactive.

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Recap

• WOTC was created for many industries and has a
  proven history of success.
• HKP has highly regarded customer service with
  accurate and timely reporting.
• Our streamlined platform is very simple to
  administer on our clients end.
• HKP can offer many additional services and truly
  take a lot off your plate.

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Contact Information

• taxcredits_at_hkpayroll.com
• [phone]