As of Tuesday, February 4, 2014
Washington employers earned a record $82 million in federal tax credits in 2013 for hiring certain hard-to-place job seekers.
The federal work opportunity tax credit rewards employers who hire military veterans, the disabled, ex-inmates, food-stamp and welfare recipients and individuals who receive Supplemental Security Income. The tax credit can range from $2,400 to $9,600, depending on the eligibility category of each new hire. The credit is deducted from employers’ federal income taxes.
“Everybody deserves a chance to earn a living,” said Washington State Employment Security Commissioner Dale Peinecke. “The work opportunity tax credit provides the leg up some workers need to break through and land a job.”
In 2013, the state’s Employment Security Department received more than 56,000 applications from 2,632 Washington businesses. Some 30,744 of the hires qualified for the tax credit. Food-stamp recipients represented 73 percent of all certifications. Welfare recipients and veterans were another 16 percent and 6 percent, respectively.
Employers apply for the credit through Employment Security’s website, esd.wa.gov. Applications must be submitted within 28 days after the qualifying new employee starts the new job.
Tax credits begin accumulating after an eligible new employee works 120 hours and earns at least $1,118, and the credits reach their maximum after 400 work hours.
Businesses certified for the credit must complete IRS Form 5884 when submitting their federal income taxes.
The work opportunity tax credit program officially expired at the end of December 2013, but Congress historically has reauthorized the program back to the date of expiration.
“We don’t know if or when Congress will extend the program, but we encourage employers to continue to submit applications for eligible new hires within the 28-day window,” said Peinecke.
“We’d hate for employers to miss out on tax incentives they’ve earned.”
Employers can visit the Employment Security website or call 800-339-3981 for more information.