Tax Credit Services Bureau of Workforce Development Partnership 651 Boas Street, 12 th Floor Harrisburg, PA 17121

Tax Credit Services Agenda Work Opportunity Tax Credit Federal Bonding Program Questions and Answers

W ork O pportunity T ax C redit What is WOTC ? WOTC is a Federal tax credit available to employers who hire and retain Veterans and individuals from other target groups with significant barriers to employment.

Work Opportunity Tax Credit Program Highlights Savings for employers No limit on the number of new hires Any size employer can benefit Qualified “tax-exempt” (i.e., 501(c)) organizations are now eligible to claim the WOTC for Veteran new hires.

Work Opportunity Tax Credit Target Groups Veterans – 5 categories TANF Recipients SNAP (Food Stamps) Recipients Designated Community Residents Vocational Rehabilitation Referral Ex-Felons Supplemental Security Income Recipients Summer Youth

Work Opportunity Tax Credit How Is The Credit Determined Employers generally can earn a tax credit equal to 25% or 40% of a new employee's first-year wages, up to the maximum for the target group to which the employee belongs. 25% for working 120 hours 40% for working 400 hours

Work Opportunity Tax Credit Veteran Target Groups Receiving SNAP (food stamps) Benefits $2,400 Disabled Veteran - Hired within 1 Year of Leaving Service $4,800 Disabled Veteran - Unemployed 6 Months $9,600 Unemployed Veteran (4 Weeks) $2,400 Unemployed Veteran (6 Months) $5,600

Work Opportunity Tax Credit Other Target Groups Short-Term TANF Recipient$2,400 Long-Term TANF Recipient$9,000 (over 2 years) SNAP (food stamp) Recipient$2,400 Designated Community Resident $2,400 Vocational Rehab Referral$2,400 Ex-Felon$2,400 SSI Recipient$2,400 Summer Youth Employee$2,400

Work Opportunity Tax Credit Tax Exempt Organizations (501C) Credit = 16.25% of qualified 1 st year wages for at least 120 hours of service Credit = 26% of qualified 1 st year wages for at least 400 hours of service (Credit goes against payroll taxes.)

Applying for the Credit To request a tax credit for a potentially-eligible individual, the employer must submit: IRS form 8850 and ETA Form 9061 Forms postmarked no later than 28 days after the start date Note: Forms may be submitted electronically via CWDS Work Opportunity Tax Credit

Employers can access forms through Commonwealth Workforce Development System’s Help Center. Click on this icon which is located in the upper right hand corner Look under “List of Miscellaneous Documents” Tax Credit Forms

Work Opportunity Tax Credit Employers may also contact:  PA CareerLink ® Offices  Offices of Vocational Rehabilitation (OVR)  County Assistance Office’s  Tax Credit or Tax Credit Forms

Work Opportunity Tax Credit Employers mail completed forms to: Department of Labor & Industry Tax Credit Services 651 Boas Street, 12 th floor Harrisburg, PA Tax Credit Services Address

Federal Bonding Program

Program Objective In 1966 the U.S. Department of Labor established The Federal Bonding Program to provide Fidelity Bonds that guarantee honesty for “at-risk”, hard-to-place job seekers.

Federal Bonding Program Program Highlights  No cost to the applicant or employer  No paperwork to complete  No waiting - Bond issued immediately  No deductible  Bond is good for 6 $5,000.00

Federal Bonding Program Qualifications  Anyone with a barrier to employment.  Any employee who requires bonding to stay employed due to a promotion with increased monetary responsibilities.

Federal Bonding Program Program Restrictions  Must be of legal working age in PA.  Must pay federal taxes through payroll deduction.  Must remain on the job for a minimum of 6 months.  Self-Employed individuals are ineligible.

Federal Bonding Program Bond Issue Process 1)Employer contacts the State Bonding Coordinator (SBC) on the new employees first day of work. 2)SBC sends confirmation letter to employer. 3)Fidelity Bond is mailed to the employer within 2 weeks.

Federal Bonding Program Contact Information State Bonding Coordinator (717) Federal Bond Website

Tax Credits and Bonding

Contact Information Greg Shirk Tax Credit Services (717) |