Washington employers will collect a record $56 million in 2011 federal tax credits because they hired certain hard-to-place job seekers.
The Work Opportunity Tax Credit provides up to $2,400 in tax savings per worker to businesses that hire military veterans, the disabled, ex-inmates, food-stamp recipients and individuals who receive Supplemental Security Income. Additionally, businesses that hire long-term welfare recipients can save as much as $9,000 per person over two years.
In 2012, businesses can enjoy even greater tax savings for hiring veterans, including up to $5,600 for long-term unemployed veterans and as much as $9,600 for those who have a service-connected disability.
To receive the tax credit, each new employee must work a minimum of 400 hours during the first year of employment and earn at least $6,000.
“This program helps businesses defray the costs of hiring and training new workers, and it opens doors for individuals who have the hardest time competing for work,” said Employment Security Commissioner Paul Trause.
Businesses apply for the Work Opportunity Tax Credit through the state’s Employment Security Department, which works with other governmental agencies to certify the eligibility of hired workers. The application must be submitted within 28 days after the hire.
Employment Security received more than 48,500 applications for the 2011 credit from 3,192 Washington businesses, a 3 percent increase from 2010.
The department approved about 21,850 applications in 2011, which included applications for hires made near the end of 2010. Due to lag times, the certification process for some 2011 applications will be completed in 2012.
Businesses certified for the credit must complete IRS Form 5884 when submitting their federal income taxes.
Employers who want to participate should call Employment Security at 800-669-9271.