Help an Underserved Population and Receive a Hiring Tax Credit

If you own a company that is located in an enterprise zone in California, you are positioned to earn tax credits for simply setting up your shop in what is known as an economically at-risk area. There are other tax credits that are available to your business in an enterprise zone, and these are work opportunity tax credits, also known as WOTC California. When you hire employees that qualify under this program, your business will receive an enterprise zone hiring tax credit for each employee that meets the requirements.

There are certain people groups that the federal and state government have determined are underserved when it comes to finding well-paid jobs. These people groups include those with economic, physical and other challenges. Military veterans are also a part of this group. People who receive welfare, food stamps or other types of government assistance, as well as those who are ex-offenders or who have been unemployed or facing a layoff may also qualify your company for tax credits for hiring veterans and other underserved groups.

Veterans, because of their military training, are excellent candidates for many positions in the civilian workforce. Your company can earn federal hiring tax credit benefits of up to $4,800 per employee, most especially if the veteran was previously on government assistance or unemployed. If your business is located within one of California’s enterprise zones, you may also qualify for a state enterprise zone hiring tax credit for each veteran that you employ, in addition to the federal tax credits.

Federal hiring credits range from $500 to $14,000 per employee that meets the federal requirements. Some work opportunity tax credits require that the employee lives and works within the enterprise zone, for example. When federal hiring credits are combined with WOTC California tax credits, the savings can be substantial to companies.
These are Location Based Incentive Credits, LBIC, and when the federal and state locations match in geographical location is when businesses may be able to claim the highest percentage of hiring tax credit.

Another benefit to businesses in California is that work opportunity tax may be retroactive. Both federal and state enterprise zone hiring tax credit programs allow for up to three years of retroactive claims. These benefits add up quickly, and will help improve your company’s bottom line, to the benefit of your employees, yourself, as well as your shareholders.

In order to learn more about work opportunity tax credits and how they might benefit your California-based business, contact a certified public accountant today for more information.

Wayne Hemrick writes about how to Receive A Hiring Tax Credit.

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Filed Under: Human Resources