IRS Special Edition Tax Tip 2013-15, December 3, 2013

If you plan to hire soon, consider hiring veterans. If you do, you may be able to claim the federal Work Opportunity Tax Credit worth thousands of dollars.

You must act soon. The WOTC is available to employers that hire qualified veterans before the new year.

Here are six key facts about the WOTC:

1. Hiring Deadline.  Employers hiring qualified veterans before Jan. 1, 2014, may be able to claim the WOTC. The credit was set to expire at the end of 2012. The American Taxpayer Relief Act of 2012 extended it for one year. The WOTC expires on Dec. 31, 2013.
2. Maximum Credit.  The tax credit limit is $9,600 per worker for employers that operate a taxable business. The limit for tax-exempt employers is $6,240 per worker.
3. Credit Factors.  The credit amount depends on a number of factors. They include the length of time a veteran was unemployed, the number of hours worked and the amount of the wages paid during the first year of employment.
4. Disabled Veterans.  Employers hiring veterans with service-related disabilities may be eligible for the maximum tax credit.
5. State Certification.  Employers must file Form 8850, Pre-Screening Notice and Certification Request for the Work Opportunity Credit, with their state workforce agency. They must file the form within 28 days after the qualified veteran starts work. For more information, visit the U.S. Department of Labor’s WOTC website.
6. E-file.  Some states accept Form 8850 electronically.

For more about this topic, visit IRS.gov and enter ‘WOTC’ in the search box.

Additional IRS Resources:

• Work Opportunity Tax Credit Extended
• Work Opportunity Tax Credit – Frequently Asked Questions and Answers
• Form 8850, Pre-Screening Notice and Certification Request for the Work Opportunity Credit

The IRS warns consumers not to fall for bogus charity scams. They often occur in the wake of major disasters like the recent tornadoes in the Midwest or the typhoon in the Philippines. Thieves play on the goodwill of people who want to help disaster victims. They pose as a real charity in order to steal money or get private information to commit identity theft.

The scams use different tactics. Offering charity relief, criminals often:

• Claim to be with real charities to gain public trust.
• Use names similar to legitimate charities.
• Use email to steer people to bogus websites that often look like real charity sites.
• Contact people by phone or email to get them to ‘donate’ money or give their financial information.

The IRS offers the following tips to help taxpayers who wish to donate to victims:

• Donate to qualified charities.  Use the Exempt Organizations Select Check tool at IRS.gov to find qualified charities. Only donations to qualified organizations are tax-deductible. You can also find legitimate charities at the Federal Emergency Management Agency website, fema.gov. For more information about the kinds of charities that can receive deductible contributions, see Publication 526, Charitable Contributions.
• Don’t give out information.  Don’t give your Social Security number, credit card and bank account numbers or passwords to anyone. Scam artists use this information to steal your identity and money.
• Don’t give or send cash.  For security and tax record purposes, don’t give or send cash. Contribute by check, credit card or another way that provides documentation of the donation.
• Report suspected fraud.  If you suspect tax or charity-related fraud, visit IRS.gov and click on ‘Reporting Phishing’ at the bottom of the home page.

Get more information about tax scams and schemes at IRS.gov. Click on ‘Tax Fraud & Abuse’ at the bottom of the home page. You can also get Publication 526 at IRS.gov or call 800-TAX-FORM (800-829-3676).

Additional IRS Resources:

• EO Select Check
• IRS Wants You to Know About Schemes, Scams and Cons
• Tax Scams – How to Report Them
• Reporting Phishing
• Identity Protection Tips
• Publication 526, Charitable Contributions

IRS YouTube Videos:

• Phishing-Malware – English | Spanish | ASL
• Protect Yourself from Identity Theft – English | Spanish | ASL

IRS Podcasts:

• Protect Yourself from Identity Theft – English | Spanish

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