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Tax Incentives


Business Tax Credits

Work Opportunity Tax Credit (WOTC)

The Work Opportunity Tax Credit is a Federal tax credit available to employers who hire individuals from certain targeted groups who have consistently faced significant barriers to employment. There are a total of 10 target groups. The tax credits range from $2,400 to $9,600 for each qualified employee. There is no limit to the amount of tax credits that you can earn. The employee must be a new hire and the WOTC application must be submitted within 28 days of the employee's hire date. The amount of tax credits is based upon the number of hours worked during the employee's first year of employment. The employee must work a minimum of 120 hours to be eligible for tax credits. The target groups include unemployed veterans, disabled veterans, food stamp recipients, designated community residents, vocational rehabiliation referrals, ex-felons, supplemental security income recipients, and long-term unemployment recipients.

Empowerment Zone Employment Credit

The Empowerment Zone Employment Credit is an incentive to businesses that are located in an Empowerment Zone (EZ) to hire and retain employees who also live in the EZ. Businesses are eligible for a tax credit of up to $3,000 per eligible employee. Empowerment Zones are distressed urban and rural areas nationwide that are in need of revitalization. This program can save your company thousands of dollars. MJA & Associates offers free screening to determine if your company can benefit from this valuable tax incentive. Find out if your business is located in a zone.

TICKET TO WORK

The Ticket to Work Program is offered by the Social Security Administration (SSA) and can earn your company over $23,000 in cash payments for hiring individuals receiving SSI or SSDI benefits. This program is a Federally-funded employment program designed to provide Social Security disability beneficiaries (individuals receiving Social Security Disability Insurance and/or Supplemental Security Income benefits based on disability) the choices, opportunities and support they need to enter the workforce and maintain employment with the goal of becoming economically self-supporting over time.

EMPLOYEE RETENTION TAX CREDIT (ERTC)

The Employee Retention Tax Credit is a refundable tax credit designed to encourage employers to keep employees on their payroll. The credit is 50% of up to $10,000 in wages paid by an employer whose business is fully or partially suspended because of COVID-19 or whose gross receipts decline by more than 50%. Eligible employers can get immediate access to the credit by reducing employment tax deposits they are otherwise required to make. If the employer's employment tax deposits are not sufficient to cover the credit, the employer may get an advance payment from the IRS. 

Families first coronavirus response act (FFCRA)

The Families First Coronavirus Response Act (FFCRA) provides small and midsize employers refundable tax credits that reimburse them, dollar-for-dollar, for the cost of providing paid sick and family leave wages to their employees for leave related to COVID-19. The FFCRA gives business with fewer than 500 employees funds to provide employees with paid sick and family and medical leave for reasons related to COVID-19, either for the employee's own health needs or to care for family members. Workers may receive up to 80 hours of paid sick leave for their own health needs or to care for others and up to an additional ten weeks of paid family leave to care for a child whose school or place of care is closed due to COVID-19 precautions. The FFCRA covers the costs of this paid leave by providing small businesses with refundable tax credits.


STATE TAX INCENTIVES

Many States "piggy-back" some of the Federal tax incentives, which can help offset your State income taxes. These programs vary from State to State, but are designed to help create new jobs and economic growth. MJA & Associates can help identify and administer these tax programs. Contact us to find out if your State offers any tax incentives.