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Tax credits a good fit for in-home care providers and nursing homes

June 22, 2017

By Stacey May, Director of Tax Credits

The in-home care and nursing home industries are generally solid candidates for employment-related tax credits. An influx of new employees and moderate turnover of low to mid-level hourly wage positions provides opportunities to hire individuals from high-risk, historically underemployed populations and earn valuable tax credits in the process.

Why WOTC is a good fit

At the federal level, the Work Opportunity Tax Credit (WOTC) provides incentives ranging from up to $2,400 for hiring an individual on food stamps or long-term unemployed, to $9,600 for hiring a disabled and unemployed veteran. Other WOTC target groups include those receiving Temporary Assistance for Needy Families (TANF), Social Security Income recipients, multiple veteran categories, ex-felons, vocational rehabilitation referrals, summer youth employees, and designated community residents.

The WOTC application process involves the new employment prospect filling out two forms on or before the date of hire, submitting those forms to a State Workforce Agency (SWA) within 28 days of hire, and then tracking wages and hours of the new employee. If the new hire is certified by the SWA, the business can take a tax credit based on the wages earned and hours worked.

At the state level, similar employment credits exist as well. Veteran/military employment incentives are available in Alabama, Alaska, Arizona, New York, Washington and West Virginia. TANF parallels are available in Arizona, South Carolina and Virginia. Other WOTC target-group-related state credits include: Hawaii (vocational job referrals), Illinois (ex-felons), Louisiana (first-time non-violent offenders), New York (employment of persons with disabilities and at-risk youth) and North Dakota (disabled and mentally ill).

There are a large variety of other state-based credits available depending on where a business is located, if it plans on expanding or relocating, for conducting research and development, and other factors. However, businesses must generally be paying income taxes in that particular state to take any available credits, and various qualifications, including application processes with state agencies, may apply.

Regardless of where your business is located and who it hires, contracting a tax credit consultant to weigh your options and see if these programs will fit within your operation is always a wise idea. At the very least, having a consultant administer WOTC may result in thousands in savings for your bottom line.

For more information or assistance on WOTC and employment tax credits, call 888-556-0123, email taxcreditrep@hkpayroll.com  or submit our online form.

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