How is the WOTC Tax Credit claimed?

Stewart Heath

WOTC

Published on November 04, 2017

WOTC is a general business credit and can offset federal income taxes and can be carried back to the prior year or carried forward 20 years.

Taxable Employers

After an employee has been qualified and the certification secured, a taxable employer may claim the tax credit as a general business credit against their income tax using IRS form 3800.

Sole Proprietorship, S-Corp, LLC, LLP or Partnership

The credit passes to the owner, shareholder, member or partner in the same manner as losses are allocated. 

C-Corporations
The credits are used by the corporation. 

Tax-exempt Employers

Employers who are qualified as tax exempt as described in IRC Section 501(c) and exempt from taxation under IRC Section 501(a), may only claim the WOTC for qualified veterans and may not claim for other target groups.  

After an employee has been qualified and the certification secured, tax exempt employers may claim the credit against the employer social security tax using IRS Form 5884-C.  Form 5884-C 'Work Opportunity Credit for Qualified Tax-Exempt Organizations Hiring Qualified Veterans' is filed after filing the related employment tax return for the employment tax period for which the credit is being claimed. 

If you want to find out the benefits of a Worker Opportunity Tax Credit screening program (WOTC), simply email me at stewart.heath@harvardgraceadvisors.com or call (888) 350-1188.

 

 

Can WOTC or Hiring Tax Incentives on Existing Employees?