the work opportunity tax credit (wotc) for home...

CAHSAH® 2016 Annual Conference & Home Care Expo

1 2016 California Association for Health Services at Home

The Work Opportunity Tax Credit (WOTC) for home care

Derek Jones

ClearCare Online

Thank You To Our Session Sponsor, ClearCare!

Stop By Booth #213!



May 10-12, 2016 CAHSAH 50th Anniversary Annual Conference 3

Download this presentation

Tool This Presentation: www.clearcareonline.com/cahsah-download


About Me

• Originally a Botany Research Scientist

• Lead Marketing and Agency Education at ClearCare Online, San Francisco

• Previously VP Marketing for a private-duty national franchise brand with 200+ locations

• Managed a 700 client regional private-duty agency in Pennsylvania

• Launched 50 new offices with <10% failure




About ClearCare


Tool




Technology is changing our industry

has changed


New, technology-focused entrants promise innovative models

1995 1994 2006 2011 2013 2014 2015

“Client First” New “Tech First” Entrants

$20 million financing April 2015

$23 million financingJune 2015




The Tech Entrant Playbook

• Market share first, profit margins second

• Success in 1 geo-metro results in larger rounds of capital

• Put profit margin pressure on incumbent ‘client first’ agencies (you)

• Lock-up and command the supply of caregivers


The Good News…

You can punch back!




WOTC

• The Work Opportunity Tax Credit (WOTC) is a Federal taxcredit available to employers who hire individuals fromeligible target groups with significant barriers toemployment.

• WOTC can reduce an employer’s effective tax rate via a tax credit

• There is no limit on the number of employees submitted

• Credit is based on how many hours worked and how much theyare paid


WOTC Understanding

How familiar are you with the Work Opportunity Tax Credits Program?

Does your agency participate in the WOTC Program?




Steps of the Program

Qualified Criteria?

Work 120 hours?

Work 400 hours?

20% of wages up to max benefit

40% of wages up to max benefit

Complete on date of hire & submit within 28-days?

Submit on taxes


Steps of the Program

TOOL What are the most common qualified employees?http://clearcareonline.com/tax-credit-download/

Qualifying Veteran Category Max Tax Credit Benefit

Veteran: SNAP (food stamps) $2,400

Veteran: Service connected disability,hired one year from leaving service

$4,800

Veteran: Service connected disability, Unemployed at least 6 months

$9,600

Veteran: Unemployed at least 4 weeks $2,400

Veteran: Unemployed at least 6 months

$5,600

Other Qualifying Categories Max Tax Credit Benefit

Short-Term TANF Recipient $2,400

Long-Term TANF Recipient (> 2 yrs) $9,000

SNAP (food stamp) recipient $2,400

Designated Community Resident $2,400

Vocational Rehabilitation Referral $2,400

Ex-Felon $2,400

Supplemental Security Income Recipient

$2,400

Summer Youth $1,200




How is the credit calculated?

1. Does the caregiver meet one of the eligible WOTC employee categories?

2. If yes, how many hours has employee worked from their start date?

Typical Scenario- Must work a minimum of 120 hours- 120-399 hours worked = 25% of wage up to the maximum benefit- >400 hours, 40% of wage up to maximum benefit

EXAMPLE: Unemployed Veteran with service-connected disability- $12 / hour earned- 400 hours x $12 = $4,800 waged earned- Tax credit = $1,920 if retained for the whole year- @ 2,000 hours , tax credit = maximum benefit of $9,600 ($12 x 2,000 hours x 40%)


How is the credit calculated?

‘Typical’ Agency:

• 50 caregivers

• 15-20% qualify

• $1,800 is the average for health care

EXAMPLE:

50 caregivers x 17.5% = 9 eligible employees x $1,800 avg credit = $16,000 tax credit




How do I file?

Form 8850Pre-Screening Notice and Certification Request for the Work Opportunity CreditEmployers use this form to pre-screen and to make a written request to their state workforce agency (SWA) to certify an individual as a member of a targeted group for purposes of qualifying for the work opportunity credit.

Form 9061Individual Characteristics Form

Form 9062Conditional Certification

Form 5884Tax reporting form – used to report WOTC with tax return


How do I file?

Applicant receives IRS Form 8850

on or before 1st day at

work

Applicant receives IRS Form 8850

on or before 1st day at

work

8850 Form Signed/Sent

to GIS

8850 Form Signed/Sent

to GIS

8850 Rec’d/GIS generates

9061, mails to govt.

8850 Rec’d/GIS generates

9061, mails to govt.

GIS is updated with govt. agency

response/ status

GIS is updated with govt. agency

response/ status

Client is informed of

Status

Client is informed of

Status

WOTC certificate

stored

WOTC certificate

stored




After submission, what next?

Completed 8850, 9061 and all necessary documentation are submitted to the applicable state agency for review.

State agency responds to confirm eligibility:

Certification – allows the credit to be calculated and taken for all qualified wages.

Denial – the state determines that the associate has not met the criteria to allow their employer to take the WOTC credit.

Needs Letter – the state is requesting additional information/documentation to be submitted for further consideration of the certification. Once the necessary information/documentation is received by the state the Certification process begins again.


UPDATES

• Long-Term Unemployment Recipients group.• (27 months who collected unemployment)

• WOTC renewal through Dec 21st, 2019

• Lookback period approved until June 29th, 2016• For Caregiver hires between 1/1/15 – 5/31/16




FAQs

• Can I file for caregivers who are no longer employed?

• What if another agency has claimed the caregiver?

• How long do I have to meet the 120 hours?

• Can a caregiver qualify for >1 tax credit?

CAHSAH 50th Anniversary Annual Conference 26

Session Sponsor

Visit ClearCare at Booth # 213!



Speaker Information

Derek Jones, CSASr. Director of Marketing

ClearCare On line650 Townsend St, San Fran CA, 94103

PhoneFax

[email protected]

Please Make this be your Final Slide


the work opportunity tax credit (wotc) for home...

Documents