The Importance of WOTC Compliance

Work Opportunity Tax Credit (WOTC) compliance is more than just paperwork, it’s a powerful way for businesses to unlock substantial tax savings. But WOTC compliance isn’t always straightforward, and you could miss out on potential credits that directly impact your savings.  

At NetTax, we understand the vital role compliance plays in maximizing WOTC benefits. Here’s why staying on top of it can make all the difference for your business.  

What Is WOTC Compliance? 

Simply put, WOTC compliance measures how effectively a company ensures its new hires complete the required pre-screening forms. It’s calculated as the number of new hires divided by the number of employees who have completed their WOTC pre-screening forms. 

Why does this matter? The higher your compliance, the higher your opportunity to secure revenue-boosting tax credits. 

The Impact of Compliance on Tax Credits 

To see the true impact of WOTC compliance, consider these examples*: 

*The below calculations are examples, not every employee who submits their pre-screening form will qualify for the WOTC. The applicable State Workforce Agency will determine employee eligibility. 

Example 1:  

• 100 new hires, with 60 completing the WOTC pre-screening forms, equals a 60% compliance rate. 

• Once these forms are submitted to the state, an average approval rate of 30% means 18 employees become WOTC-certified. 

• 18 WOTC-certified employees X $2,400 credit = $43,200 in total credits (assuming they meet the work hours requirement). 

Example 2:  

• A boost to 80 employees completing the WOTC pre-screening forms equals an 80% compliance rate. 

• This yields 24 WOTC-certified employees. 

• At $2,400 per certified employee, you’re looking at $57,600 in total credits (assuming they meet the work hours requirements). 

Example 3:  

• Perfect 100% compliance results in all 100 pre-screening forms submitted. 

• This yields 30 WOTC-certified employees. 

• At $2,400 per certified employee, you maximize your credits at $72,000 (assuming they meet the work hours requirements). 

These examples show how small increases in compliance lead to noticeable financial benefits. 

Why Monitoring Compliance Matters 

While achieving perfect compliance may feel like a daunting task, consistent monitoring is the key to identifying gaps and improving results. This includes reviewing where forms are being missed in the hiring process or identifying bottlenecks and promptly addressing them. 

If your WOTC provider isn’t offering strategies to improve your compliance, or worse, not actively tracking it, you’re losing out on potential credits. It’s not enough to hope for higher approval rates – you need actionable data. 

How NetTax Helps You Maximize Compliance 

NetTax empowers clients with tools and insights to improve their compliance rates and claim the tax credits they deserve. With our WOTC Portal, our clients can: 

• Create custom pre-screening links for new hires 

• Automatically determine eligibility & submit to the state electronically 

• Track eligibility, submission, and certification of all new hires 

• Report on earned credits based on employee hours worked 

• Generate auto-reminder emails to stay compliant 

We also provide our clients with monthly compliance reports which can help us brainstorm ways to increase the number of WOTC onboarding surveys completed, such as translating the pre-screening survey to Spanish or providing tablets to clients who don’t have computers available for employee onboarding. 

By addressing compliance challenges head-on, we help companies see real improvements, both in their compliance percentage and in their savings. Whether you’re looking to boost compliance or need strategic guidance to improve processes, we’re here to help maximize your potential. Don’t settle for missed opportunities – contact NetTax today.