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Seasonal Summer Employees Can Provide Tax Benefit

Summer’s here, and with it comes the annual scramble for businesses to fill temporary positions. Whether you’re anticipating a surge in customers due to seasonal trends or gearing up for the upcoming holiday rush, securing reliable seasonal staff is crucial. However, the current job market presents a challenge: a shortage of qualified workers.

Fear not! This article explores some creative solutions to attract and hire top talent for your seasonal needs, while potentially reaping tax benefits in the process.

Think Outside the Box: Untapped Talent Pools

While traditional job boards can be a source of recruits, consider these often-overlooked talent pools:

  • Family First: If you have qualified family members available, consider bringing them on board. This can be a win-win situation, keeping your family employed while ensuring familiarity with your business operations. Remember, compensation must be fair and commensurate with the job duties for tax purposes.
  • Target Groups with Tax Incentives: The Work Opportunity Tax Credit (WOTC) program offers tax breaks to employers who hire individuals from specific targeted groups facing employment barriers. These groups include long-term unemployed individuals, veterans, and recipients of government assistance programs. The WOTC can significantly reduce your labor costs, making it an attractive option for seasonal hiring.

Unlocking the Benefits of the Work Opportunity Tax Credit (WOTC)

The WOTC program is a valuable tool for businesses seeking to reduce their tax burden while filling seasonal positions. Here’s a breakdown of the program’s key features:

  • Eligibility: Businesses of all sizes, both taxable and tax-exempt, can participate in WOTC.
  • Tax Credit: Employers can claim a credit of up to 40% on the first $6,000 of wages paid to qualified employees. This translates to a potential maximum credit of $2,400 per employee.
  • Targeted Groups: The WOTC program benefits employers who hire individuals from specific groups facing employment challenges. These groups include:
    • Veterans
    • Long-term unemployment recipients
    • Recipients of government assistance programs (TANF, SNAP, SSI)
    • Ex-felons
  • Certification Process: To claim the credit, employers must obtain certification from their state workforce agency verifying the employee’s eligibility within 28 days of their start date.

Taking Advantage of WOTC: A Step-by-Step Guide

Here’s a simplified roadmap to navigate the WOTC program:

  1. Identify Targeted Groups: Familiarize yourself with the WOTC’s targeted groups to determine potential hires who qualify.
  2. Pre-screening and Certification: Before claiming the credit, have potential hires certified by your state workforce agency through Form 8850.
  3. Tax Credit Claim: Once employees are certified, you can claim the WOTC on your tax return. Tax-exempt employers should consult their state workforce agency for specific procedures.

Beyond WOTC: Building a Strong Employer Brand

While WOTC offers financial incentives, remember that attracting top talent goes beyond just tax breaks. Here are some additional tips to strengthen your employer brand for seasonal hiring:

  • Craft Compelling Job Descriptions: Clearly outline job duties, responsibilities, and compensation details. Highlight the positive aspects of working for your company, including a positive work environment and opportunities for growth, even if it’s seasonal work.
  • Target Your Recruitment Efforts: Advertise on platforms frequented by your ideal seasonal workers. For summer positions, consider online job boards popular with students or recent graduates.
  • Offer Competitive Wages and Benefits: While seasonal positions may not offer full-time benefits, ensure your compensation package is competitive to attract qualified candidates.
  • Focus on Company Culture: Promote your company culture in your job postings and interviews. Highlight a positive work environment and opportunities for professional development, even for short-term positions.

By implementing these creative strategies, you can effectively address your seasonal staffing needs while potentially reaping tax benefits through the WOTC program. Remember, focusing on building a strong employer brand will not only attract qualified seasonal workers but also position your company for future success.

JS Morlu LLC is a top-tier accounting firm based in Woodbridge, Virginia, with a team of highly experienced and qualified CPAs and business advisors. We are dedicated to providing comprehensive accounting, tax, and business advisory services to clients throughout the Washington, D.C. Metro Area and the surrounding regions. With over a decade of experience, we have cultivated a deep understanding of our clients’ needs and aspirations. We recognize that our clients seek more than just value-added accounting services; they seek a trusted partner who can guide them towards achieving their business goals and personal financial well-being.
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