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New rules make it easier to claim the Work Opportunity Tax Credit

 |  By: Brian McCuller, JD, CPA, Shareholder, Practice Leader Tax


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Congress expanded the Work Opportunity Tax Credit (WOTC) in late 2015 allowing businesses to reduce their federal tax burden if they hire employees from certain target groups — including unemployed veterans, food stamp recipients, people living in certain designated economic zones and ex-felons.

Employers must apply for the credit within 28 days of hiring the employee.

Under the Protecting Americans from Tax Hikes Act of 2015 (PATH), a new category of qualified hires was added — the long-term unemployed — and the entire program was extended through 2019. These changes are designed to continue to incentivize workplace diversity and facilitate access to good jobs for American workers, particularly those who have faced significant barriers to employment.

With the addition of the long-term unemployed and the extension of the program, businesses who have not taken advantage of it in the past should take another look. It is a great opportunity and maintaining a program into the future could mean significant savings.

Originally printed in the Chattanooga Times Free Press.

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