Corporate Tax Incentives

Federal Work Opportunity Tax Credit

The Work Opportunity Tax Credit (WOTC) program is a government initiative designed to increase employment opportunities for people who have certain barriers to employment. The Employer receives a federal income tax credit that is allowed to reduce its federal income tax liability.

Estimated annual benefit for a business participating in the WOTC Program:

Annual Employee Hires	100		500		1,000
	LOW	HIGH	LOW	HIGH	LOW	HIGH
Estimated Annual WOTC	$6,000	$9,000	$30,000	$45,000	$60,000	$90,000

Program Details

• Credit is based upon a percentage of the eligible employees’ wages
• Employee must work at least 120 hours for Employer to receive credit
• WOTC encourages employers to hire from specific targeted groups
• Maximum WOTC is generally $2,400 per employee (40% of the first $6,000) over the first year of employment. However, Welfare-to-Work category (Long-term Family Assistance Recipient) does allow for a maximum credit of $9,000 over a two-year period
• Employee must complete IRS Form 8850 on or before starting the job
• Form 8850 must be postmarked within 28 days of start date and sent to the state Department of Labor for certification
• WOTC program extended through August 2011 Î Similar to/or works in conjunction with other federal, state and local programs

Qualification Categories – Target Groups

Below we provide the details of the target groups. Please note that they are only provided for your reference to better understand how an individual qualifies for the program. It is not necessary for you to have a full understanding of the target groups. The new employee must belong to one of the following twelve (12) WOTC target groups:

Long-term TANF Recipient

A member of a family that:

Other TANF Recipient

A member of a family that is receiving or recently received TANF benefits for any 9-month period during the 18-month period ending on the hiring date.

Qualified Food Stamp Recipient

An 18-39 year old member of a family that received Food Stamps for the past 6 months, or received Food Stamps for at least 3 of the past 5 months.

Designated Community Resident

An 18-39 year old resident of one of the federally designated Empowerment Zones (EZs), Enterprise Communities (ECs), Renewal Communities (RCs), and for individuals who begin to work for an employer after May 25, 2007, this High-Risk Youth group has been renamed “Designated Community Resident” and expanded to include residents of Rural Renewal Counties.

Summer Youth Employee

A 16-17 year old EZ/EC or RC resident hired between May 1 and September 15.

Qualified Veteran

A veteran who is a member of a family that is receiving or recently received Food Stamps for at least a 3-month period during the past 15 months; and for individuals who begin to work for an employer after May 25, 2007. The veteran group is expanded to include “disabled veterans” who are entitled to compensation for a service-connected disability and who, during the one-year ending on the hiring date, were: a) discharged or released from active duty in the U.S. Armed Forces, or b) unemployed for a period or periods totaling at least 6 months. The first-year wages taken into account for these “disabled veterans” are capped at $12,000.

Vocational Rehabilitation Referral

An individual who completed or is completing rehabilitative services from a State certified agency, an Employment Network, or the U.S. Department of Veterans Affairs.

Qualified Ex-Felon

An individual who has been convicted of a felony and has a hiring date which is not more than one-year after the last date on which he was so convicted or released from prison.

SSI Recipient

A recipient of Supplemental Security Income (SSI) benefits for any month ending during the past 60-day period ending on the hire date.

Hurricane Katrina employee

An individual who, on August 28, 2005, had a primary residence in the Gulf Opportunity (GO) Zone (core disaster zone) and, during a 4-year period beginning on this date, is hired to perform services, principally, in the GO Zone. State certification does not apply to this group.

Unemployed Veteran

A veteran discharged from active duty during the 5-year period ending upon hiring date and received unemployment compensation for at least 4 weeks during the year prior to being hired.

Disconnected Youth

Individual at least 16 but not reached 25 years of age on his or her hiring date, lacks basic skills that would make him/her employable, and during the 6-month period prior to hiring date, the employee must not have been regularly employed nor attending secondary, technical, or post- secondary school. The Conference Committee report intends that a low-level of formal education satisfies the requirement of lacking basic skills.

Benefit Value Proposition

The actual credit earned will depend largely on two important factors:

• Compliance Rate – related to our effectiveness of  ensuring that all hires properly complete the forms.
• Forms Compliance rate – related to our timeliness in  completing the process. The WOTC program requires  that we file the initial forms with the state within 28 days  from the employee’s first day of work.

Reporting plays a large role in maintaining the effectiveness of the program and the main method of communicating the results to the appropriate people in the Company. The reports are based on the following key data sources:

• Regular payroll feed from the company to identify new  employees and obtain payroll information to calculate  credit amount for qualified employees
• Data from employee credit screening packages  received from property locations
• Activity generated within CTI from processing   the applications

The main report is the Compliance Report that will provide information as to the percentage of new hires that were properly screened by CTI. Our goal will be to ensure that each location maintains a compliance percentage of over 90%. We are committed to working with the locations to provide the necessary training and support to reach this goal.