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The WOTC gives employers up to 12k in a federal tax credit.

If an eligible persons of...
The WOTC gives employers up to 12k in a federal tax credit. If an eligible persons of the WOTC starts a business and hires themselves can that business claim the WOTC? SCorp LLC
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Customer reply replied 7 months ago
Hi there, I'm still looking for help if anyone can respond. Thank you.
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Please help
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Hi guys please help
Answered in 5 days by:
4/19/2017
Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 12,847
Experience: Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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Hi. My name's Lane. I can help.

...

I hold a law degree, with concentration in Tax Law, Estate law & Corporate law, an MBA, with specialization in finance a BBA, and CFP & CRPS designations, as well - I’ve been providing financial, Social Security/Medicare, estate, corporate, non-profit, and tax advice, to clients on three continents since 1986.

...

Likely yes, but bear with me for a few moments while I research and verify this.

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You WILL need to be an employee of the company (S-Corp requires that).

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BUT, you must reduce your deduction for wages by the total amount of the credit. If you pay yourself $20,000 for the year and take the maximum credit of $2,400 (40% x the first $6,000 in wages), then on your 1120-S, (S-Corp's tax return) return you can only deduct $17,600 in wages.

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The WOTC is taken on Form 3800 of your personal return as a general business tax credit, but it is not refundable. In other words, if your total tax liability after other credits and deductions comes to zero for the year, you cannot take the WOTC for that year. You can carry it forward up to twenty years or carry it back to the previous year.

Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 12,847
Experience: Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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Finally, Self-employed individuals do not qualify as WOTC hires. (Self-Employed is a very specific tax term meaning LLC members not electing corporate taxation, sole proprietors, and sole proprietors. You'll need to do this as a shareholder/employee of either an S-COrp or a C-Corp.

...

Thanks much for the rating

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Lane
Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
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Experience: Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986

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