WOTC in Real Estate: Eligibility, Credits, and Next Steps

Once the credit's extended, which everybody anticipates will happen, then they will start processing those applications that are already being submitted. So typically a company that has been screening for Watse doesn't stop screening at the time the credit lapses. They just continue that process. And then we'll see what happens with the extension or when the extension happens. Currently, there is an act being considered by Congress, the Improve and Enhance the Work Opportunity Tax Credit Act. The proposal that's under consideration at the moment has bipartisan support. We don't anticipate anything happening with it until after the midterms, obviously. But as an example, this act that's being considered would extend the credit another five years and would expand it. So that's been a common practice with the credit since 1996. So for many years, the credit was extended year by year and there would be these lapses or hiatus periods and then slowly but surely the bipartisan support that it's had evolved to become something even greater and they started expanding the credit to reach a larger population.

So when I think of Watsi today, I think about veterans, I think about folks coming off long-term unemployment. I think of folks that are on social service programs. But when the credit first started, it was much more narrow. I think there were 10 qualifying target groups and now there's something like 15. The credit originally was worth $2,400 per qualified individual max. Now it can be worth up to $9,600. So again, the hiatus period is something to not shy away from. You can actually, if you aren't screening for Watse now, you can start the process and begin evaluating it, understanding what it takes to take advantage of the credit, and you can start screening. Like I said, all the states are just holding tight, waiting to process those applications as soon as the law is extended.

Now let's talk a little bit more about the credit. Now who counts? So this is really, it's easier to talk about who doesn't count, right? Who can't this credit be generated on? So you can't generate the credit on contract employees. That makes a lot of sense, right? Direct employees. So anybody that is getting paid on a W-2, it's available to full part-time and seasonal. So if you're familiar with hiring credits at the state level, oftentimes those credits put limitations based on length of employment. So whether they're part-time, full-time or seasonal, those can be disqualifiers, not Watse. Then you can't include rehires. So that's something that gets screened out in the screening process, but anybody that's a rehired to the organization is not eligible. And then relatives and dependents of the owners. So otherwise, as we said, it's really available to anybody that's a direct employee of the company.

The other thing to think about is, and this doesn't factor into the certification process, whether they actually qualify under a target group or not, but once we've identified that the individual does qualify and they've been certified and you're starting to track the credit generated on those individuals, the minimum hours required to work work hours required in order to generate credit is 120. So an individual that works 119 hours through their first year of employment, they might be certified to claim their credit, but they haven't met the minimum threshold to generate credit. And that's an important nuance. This is something we see a lot with temporary staffing agencies where they might generate a number of certified and qualified people, but because they don't meet the 120 hour threshold, they're not able to generate credit. So that's an important number. It really doesn't take a lot to get to 120 hours as we know, but it's an important differentiator.

And then lastly, the target groups, and we're not going to go into detail in those because I think you can't control whether an individual qualifies or not from a target group perspective. Those are personal factors that each individual basically self-determines. There's a screening questionnaire, we'll go into this, but that's used to evaluate whether an individual qualifies or not. But we try to tell people, let's not focus on the target groups because I know I've read studies that say something like 20% of the US population falls into one of these categories and as they expand the credit, those numbers change obviously. So we try to focus less on the target groups and more on the process and understanding what it takes, what the value is. And today, this is really a technology solution. Back in 1996, it wasn't. In 1996, and I'd say through 2012, this was a paper driven process that put a tremendous amount of burden on HR departments.

But now with the evolution of technology, both from the IRS's perspective and the state's perspectives, they use technology now to process for these credits, but also obviously on the HRIS systems and the ATS systems and payroll systems. Technology has really evolved to a point now where this is what was a paper-based burdensome credit and burdensome process that only large employers looked at and considered because the payoff was so great. Today, companies of any size can really take advantage of this credit, and that's an important note. I think what I see often is large employers, folks that hire thousands of people a year, traditionally have pursued this credit, but it's something that everybody should be looking at no matter your size. It's really not about your size anymore. It's about, do you have the process in place? And if you do, I think about it as housekeeping, something that once you put it in place, it's almost a set it and forget it.

There's a backend that needs to be taken care of, but it definitely isn't what it used to be. And it's one really good example of how technology can really make a difference.

Now, I mentioned this at the beginning, how much is the credit worth? So at a minimum, the credit is worth $2,400 for most target groups. So that's a calculation based on hours worked, the category they qualify under, and the wages they earn. But there are certain categories, most notably a qualified veteran category that can generate up to $9,600, and that's just based on the first year of employment. And then there's another long-term family assistance category that can generate $9,000, but that's over two years. So there's a lot of money that is available for an individual once they're qualified. And again, federal income tax credit, so it's extremely valuable. If you're not able to take something like the federal R&D credit, this is something you should really be considering. And like I said, even if you are taking R&D or any of the other federal credits, this is something that all businesses should consider because like I said before, technology allows companies of any size to take advantage of this, where historically it was a big box retailer primarily that we take advantage of.

So as I said before, when you're calculating the credit, we look at how many hours they worked, how much money they earned, and what target category they're in. And so the first qualifying wage band would be, or hours work ban, I guess I'd say, is 25%. So as soon as an individual hits that magical 120 hours, you can generate up to 25% of their qualified wages as a credit. And that caps at 399 hours. As soon as they hit 400, the credit calculation jumps from 25 to 40%. Now again, reiterating, under 120 hours, no credit. So this is really for a workforce that's going to be able to hit 120 hours. So three 40 hour weeks essentially is the way to think about that. Okay. I'm going to pass it off now.

Justin Zucca: All right. So before I do that, we got a question and Annette, I'm going to throw this one to you. Can we submit 2026 new hires from the beginning of the year? With your experience, could you give a brief answer to that? Yeah,

Annette Fago: That's a great question. So you can't go back, as the law's written right now, no, you cannot go back and retroactively submit on people hired in 2026. The way it works right now is that if you start screening Watsy today, you can submit applications for folks that were hired after you start the process of screening. We're going to wait, see what the extension looks like because once in the past, extensions have allowed for companies to go back retroactively, but that's not always the case. So we are not in a place right now where you can go back and screen everybody hired in 2026. That may be an option and we're going to have to wait and see that.

Justin Zucca: Thank you. All right. So my name's Justin Zucca. I'm one of the co-founders of Federal Credit Advisors. We implement a lot of the systems to get Watse up and running. And really where I want to start with is when it comes to Watse, often companies think about industry, but what we've found, however, is really it's wage levels that can be much more useful as a starting point. The strongest opportunities genuinely appear in businesses with large hourly workforces, maybe a mixed wage population. What I mean by that is salary and hourly, but it's really the magic number for us is $35 per hour and under. That's when we tend to see the highest eligible trends. Within that population, we even noticed, and this is the Department of Labor, between $15 and $20 an hour represent the largest qualified groups, and that was as of 2024's data.

So often we think, like Annette was saying, big box, things like that, but you kind of have to peel that away. That's why we're talking about real estate is because there's a lot of these administrative roles that pay in that wages that it's really beneficial. So it's not limited to companies that consider themselves traditionally work opportunity tax credit heavy. A business may have a qualifying employee within particular wage bands or even departments, even when it's overall workforce does not appear to kind of fit that typical profile, I guess you could call it. Wage alone does not determine whether an employee qualifies, just to kind of piggyback off of that, but wage gives us a way to estimate or understand if it's going to be a highly successful program or just how well it's going to perform. I would say my main takeaway when it comes to this is really the key takeaway is wage level is often the most reliable place to begin the eligibility conversation.

So once we begin to look at the workforce through a wage-based lens, we often find that opportunity is broader and less obvious, I would say, than the employer initially expected. This is why we really look at the opportunity as kind of hidden in plain sight. Many businesses have more wage diversity than they realize. Even companies with large professional salaries, high tech jobs, they often employ administrative staff, customer service teams, just operational employees, entry level workers, just I would call it overall hourly populations. That is often where eligibility can appear in those parts of the organizations that management may not immediately associate with the work opportunity tax credit. Again, another Department of Labor stat is office and administrative roles represent the largest volume over all of the years when it comes to the work opportunity tax credit and who qualifies. It's really important because those populations of jobs exist across really every industry.

So minimum wage industries, I would say, that exist in healthcare, logistics, manufacturing, those are good examples of mixed wage industries that traditionally will overlook this.

And again, you can apply this anywhere. By examining wage bands versus industry, it allows us to not make assumptions that, "Hey, this is not a fit for me." We have seen companies that don't traditionally fall in, have very successful programs. I mentioned manufacturing, they'll tap into those other veteran credits and things like that. So again, companies may already have meaningful WOTC opportunities and not even realize it within their existing hiring activity, and they simply just need to put the right process in place in order to really uncover it. So with that, we're going to go into our next polling question and kind of steps off, what share of your workforce earns under that $35 an hour mark that could fall into that work opportunity tax credit group? I'm going to give you all a little time here to answer this. Thank you, Astrid. Looks like we have about half of the individuals already answered.

Okay, I'm going to shut down the question in about 10 seconds here. Okay. So yeah, that's a perfect example is less than 25%, but that's half the companies and that's a lot of what we see is that office administrative role fills that gap. So I'm going to turn this over to my partner, Ave Patel. He's going to really walk through the process of what it is needed to capture it and kind of give you a little operational backend.

Abhay Patel: Hi everyone. Yep. So I'm also another co-founder of Federal Credits, head the WOTC practice, and I want to really go over what our technology would allow in terms of WOTC and how it enables that process and makes it a lot simpler from where you can kind of implement it if you're not traditionally looking at it. So once you know where the eligibility is, like Justin said, now it's like, how do you capture it? What we covered was where it lives. Now we want to know, can technology and any solutions that provides make it easier for us to implement it so that way even small businesses that hire maybe one or two people all the way up to hundreds of people can easily just capture those credits.

So as a starting point, we're kind of break it down where there's typically five main points that we kind of consider for WATSI hires. As a new hire, you're going to go through this process if you're going to want to claim that credit. Now the first step is IRS forms. These are forms that are required to be filled out for any new hire, the 8850, 9061. I'm not going to go into detail. They're IRS forms, they're very verbose. There's a lot of information on it. There's going to be a lot of things that you have to complete, but that is required as the first step. And I think this has been mentioned and had answered a question about the 28 day filing deadline. Now that is a strict deadline that's written in the law, in the legislation to kind of restrict who is eligible for the credit.

Once you hire somebody and they state a start date, you have to basically have those forms that they filled out submitted within a 28-day window. Once it passes that 28-day window, the eligibility would then cease. You cannot submit it past a 28-day window and you cannot basically go beyond that. That is a limiting factor. Again, and I did say in circumstances where there is a lapse in a hiatus period and currently there is one, then there is a lookback period. So we are waiting for that currently and there might be a lookback period up until January 1st, 2026. And in the past it has happened, but that is the only exception to this rule unless they change that in the next legislation that's coming out. Now for the third part is supporting documents. So anybody that's being qualified, there are certain documents that need to be provided along with the 8850 and the 9061.

So if you're a veteran, there's a veteran form, basically a discharge paperwork that basically qualifies them as a veteran. There's other long-term unemployment verification stuff. There's stuff that the state also verifies on their end, but this is also needed to be able to verify that these people are eligible under the criteria. It's not always needed, but in certain cases it is. The fourth step is state agency follow-up. Now this is more of an administrative process. Once it's pushed to the state to be certified for that individual, there is a back and forth with the state. They will put it in hold until they can review it. That could take a couple of days. It could be instant. It could be a couple months. You never know. So there's a follow-up that we need to do manually where we can go and say, "Hey, where's this application at?

Is there any supporting documentation needed? Is there any other additional information that's missing that needs to be followed up? If it's been denied, how do we go about appealing that process if we do have the proper paperwork?" And that is a whole process in and of itself. Now, the fifth part is hours and wages, right? So once you get a certification back from the state agency, you want to make sure that you're tracking hours and wages because that's what ends up driving the credit. You need to have the hours and wages to be able to calculate the final credit based on what eligibility criteria they were certified for, what the wage cap is, and the hour bands, which are a minimum 120 to get a partial credit and up to 400. And once you pass 400, you get the maximum credit based on that wage cap being met.

Now where this breaks, again, I mentioned the 28 day filing deadline, that's a very strict deadline. You have to be able to send these applications in a timely fashion. And then the other portion is low screening participation. So if you're screening these new hires, those forms need to be filled out. There's a lot of gap there. If HR is not following up in a timely manner or the new hires don't know how to access these forms or fill them out or there's some misunderstanding, that can participate, the participation can become low. And this all basically makes for a... It basically has an effect of having uncaptured credits. All these different portions kind of contribute to that factor.

So how does WOTC work? I'm going to break it down a little bit more. Basically, there's three parts to every WOTC claim. The first part is qualifying the individual. Like I said, there's a screening process. You have to be able to fill out the 8850, the 9061, and those are very verbose documentation that needs to be filled out by each new hire. Then there's the second part, which is submit to the state. You need to file again with the 28-day window to the state. And the state workforce agencies are the ones that manage this process. Even though it's a federal credit, the states individually will be receiving these applications and basically going through the process of verifying the information and certifying or denying the credit. Now, for the third part is tracking pay. Like I mentioned, you need to follow the hours and wages to calculate that credit.

So it's really important to be able to access payroll data, to be able to see all the wages being added on a periodic basis. Now, each part can be done by hand. Obviously, it's been traditionally done since the inception of the credit up until, as Annette had mentioned, 2012, and when we started to see a trickle of technology take over. So basically there's a manual process and there's a automation through technology that can be achieved.

So when you have to qualify that individual, there's two ways to do it, like I mentioned, manual or automated through technology. The manual process, you're looking at those forms, the 8850 and the 9061 IRS forms. They're presented at onboarding to a new hire. The new hire's filling out all their onboarding paperwork, and this is just additional paperwork that they have to fill out. Now, this additional paperwork is very complicated. Some new hires especially will not understand all the wording or it might be a little bit too verbose and they might try to skip it because it doesn't make sense. So then when HR hands it out, whoever is collecting this information and checks each form, there's a gap there. So they have to chase that new hire to finish it or complete it, or there might be some miscommunication. So all this stuff contributes to not having the proper forms filled out in a timely fashion.

Now with technology, what we provide is a user-friendly interface that's not physical. It's going to be online. It's going to be an easy form to fill out. Questions are simplified in a sense to be able to be easily readable and understandable, and that way any individual that's going through this process can fill them out fairly quickly and submit it in a timely fashion. The other advantage of technology is that it's built in ATF or applicant tracking system or onboarding workflow, wherever that lives. So you can access that while you're doing your onboarding workflow as a new hire. That could be on a phone, a laptop, a computer, wherever you are. So that makes it a lot simpler in the long term to be able to get this stuff done within that 28-day window. And then we also collect an e-signature at a point of hire.

This is important because there has to be some audit trail to say that they actually filled this out and that we have verification that they access that screening process and we're able to answer the questions to the best of their ability and basically certify that they're answering these questions themselves. And that's a service The technology option. It's going to be a user-friendly interface that's easily accessible in place of all these physical forms that creates significant gaps.

Now, the second part is submitting to the state. Like I mentioned, it's a very bureaucratic process. There's a lot of back and forth. So once you collect all this information, which was that first step, now you have to go and mail or upload forms to each state workforce agency. There are some simpler online solutions, but again, it's a manual process if you're doing it by yourself without the technology solution, because you're going to be collating paper forms, you're going to be scanning them, faxing them, emailing them, uploading them online individually. You have to also track the 28 day deadline, which is crucial. So if you have a lot of applications or even one or two, you might miss this because you're not tracking that. You're not getting a constant reminder that says, "Okay, the deadline's coming up. Let me submit this or let me follow up with my new hire to fill it out." Now, you can also call and email the states for a status and document request, but that's a manual process.

Sometimes you can get them on the phone. Sometimes you might get an email response a couple days later and it's not immediate. Now with technology, a lot of states have online WOTC portals that we can kind of batch file a lot of new hires all at once. So this simplifies a process. When a new hire fills out the information through the online screening process, it comes to us. We make sure the information's consistent through automation. Basically the technology will make sure there's no gaps in information. And once it's approved, basically it automatically is filed with the state. And also if there's any missing information, there's deadline tracking with early alerts. So we periodically will ping the new hire, say, "Hey, you left this incomplete." We'll notify HR or whoever's managing that process to also say, "Your new hire has not filled out the complete information." And it's a gentle reminder to be able to get you on track for that 28 day deadline.

Now also we have live status for every hire. So once you submit it, you need to know where is the application? Is it still pending with that state workforce agency? Has it been certified? Has it been denied? Are we appealing that? There's a whole process to that that we want to make sure that the end user, HR or whoever's handling that process is aware of so they can kind of track it as it's going along.

There's a question from Janice. "What state agency is the form 8850 sent to for eligibility? "Each state has their own agency that handles it. So all 50 states and DC. So basically when you're sending this in, it's to each individual state. And that's why I said the manual process becomes very bureaucratic and very cumbersome if you're doing it on your own. Obviously not everybody's hiring in 50 states, but if you are, you're going to have to send it to each individual state that basically the employer is working out of. So a majority of you, I'm not sure where you're from, but if it's New York, you're going to be sending it to New York. If it's New Jersey, Connecticut, you're going to be sending it there based on the place of work. So it

Justin Zucca: Can become - Just add onto that, it's usually a workforce agency, a Department of Labor. It could be a Department of Job and Family Services. So each state has their own agency.

Abhay Patel: They allocate resources based on how they can fund that on the state level. So it depends.

Annette Fago: Let me just add on that. To give people a context, each state has usually a team dedicated just to processing this credit. Some states it might only be one person, but other states have entire departments depending on the size typically. And they're solely dedicated to processing the credit. So while this may not be a credit you are familiar with on a day-to-day basis, there's a team in every state that's solely focused on this, which is nice because you're not just getting passed around. There is an agency in each state that has a process. And to what Abe was saying before, in some states they're going to process because they have access to the information they need in order to verify the answers to the questions that have been provided. So they'll verify whether an individual has received a certain type of social services assistance or unemployment.

Most of the agencies tend to be the agencies that provide unemployment insurance services to individuals. So in New York, it's the Department of Labor. So it's not the UI department that handles Watsi, but the Watse team has access to the UI information, which helps validate the answers to the questions. So there's a symbiosis there, I guess, just to say it.

Abhay Patel: Thank you. Yeah. And that's a great way to put it where a lot of the information is within the state. So when you're submitting this information, even if there's some incorrect information, states are very proactive in searching their records to make sure these individuals qualify for even additional credits. So if there's a veteran that has been qualified, but they didn't provide a veteran affidavit form and they're eligible under say another criteria, it'll come back. They will flag it. They'll come back with another eligibility. So we try to be proactive. If there's a more lucrative level of credit that's available, we'll kind of resubmit that, but that's a whole process. That's the bureaucratic part of this credit basically. So now the third part of the credit is track pay. So you want to track the payroll, the hours and wages. So it's a manual process usually with spreadsheets of hours and wages for each certified hire.

You want to WOTC those, as I mentioned, the 120 hour and the 400 hour thresholds. Those are where the credits are from 25% to 40% and they kind of jump. So you have to be constantly looking at payroll data to see where the credit lands. And it becomes a manual process to calculate these credits at the end of the year. So each year you're going to go and say, "These are my certified hires. These are the hours of wages that they currently have. Based on the eligibility criteria of the wage bands, the hour, let me now calculate the credit per employee." And that's a cumbersome process. If you have a lot of people, even if you have one or two people, you're going to have to do this manually and it kind of can fall through the cracks. With the automated process, we can kind of hook into your payroll or HRS data wherever it lives, whatever your payroll provider is, wherever that is, we can directly get the data for each individual certified hire.

And that would be preferably a live feed. So as they're generating more payroll, the biweekly or whatever that payroll cadence is, we can pull that data as needed and then basically show you a live track of what that credit lives. So if they've just met the 120 hours and they have whatever maxed out wages, then you can see that credit value as it is every day. So that's the advantage of technology. Now also, you can also see credit reports. Basically, we're going to be calculating those credits automatically. So at a period basis, at a quarterly basis, whatever you need those credit reports at, you can get an update. You can even go into a live portal and view those credit reports. And it comes with the audit trail because we want to make sure that all this is confirmed, the CPA is okay with it, and we can make sure that every single dollar is accounted for in terms of credit and hours and wages.

So this is our third polling question. I'm going to open it up. How is Watse screening handled today? And just to answer, if you don't know or if you don't handle it personally, just answer how best you can, but...

Justin Zucca: Yeah, we'll give 60 seconds for this one as well.

Astrid Garcia: I'll jump in here. Just a reminder to everyone, in order to answer the polls, they are shown within the slides widget. So if you're able to see the slides, you're able to answer the polls. If you don't see the slides, make sure that you, on the toggle bar at the top in the navigation bar, you select slides widget and then it'll pop up. So the polls are within the slides.

Justin Zucca: And we can let this extend a little bit more. Yeah. Looks like we have almost 90% people answered.

Abhay Patel: All right. Five seconds. All right. Yeah. I mean, through a payroll provider or HR provider, that's great. If you guys are doing that already, that's a great way to screen for Watse. But if you have no screening in place, again, really simple to start screening at any time. Paper forms, I didn't know anybody still does paperworks, but that's still simple to get it automated. So let's look a little bit beyond Watse. There's a lot of information that's collected, but ultimately you want to use that data in a meaningful way to discover more credits. Now with Watse, you're kind of already capturing some data, hire dates, addresses, wages, hours, you have job roles, locations. There's a whole bunch of PII information for employees that can kind of contribute to these additional credits at the state level, which there's hiring credits always available that already match with WOTC.

So we already integrated a few of them with the screening process, so it's a little simpler. We can dual screen for certain individuals in certain states. Now, there's also location-based incentives. There's enterprise zones and state designated areas for job creation. And those are also something that can be dually screened while you're screening for Watse as well.

Now, beyond Watse, what we're looking at is the operational powers will reveal something. So when you're looking at data that shows headcount growth, you're going to look at specific state job creation credits and training grants. If you're looking at new builds and renovations, then you're going to look at cost segment energy incentives. So when we're collecting all this data, you're kind of seeing the new hires, you're talking with the company itself, but you'll see the pattern within the WOTC data. Same with the TIP staff and hospitality, you're going to look at the FICA tip credit. If you're looking at a process or technology improvement, let's say there's a bunch of new hires that are very technical and you kind of notice that pattern. Well, now you're going to suggest, "Hey, look at the R&D tax credit as well." That's a very good one for that.

So I'm going to turn it over to Annette. This is a very specific credit in the New York state, and this is a great credit to talk about that is very good in conjunction with Watse.

Annette Fago: Thanks, Ave. So I think we wanted to give an opportunity or some attention to some of the state credits. I think there are a number of state hiring credits available throughout the country, and there's a differentiation, I'd say. When you think about hiring credits, to his point on the previous slide, there are credits that are what we typically call piggyback credits, credits that function and form similarly to WOTC. Years ago, there used to be a number of states that had identical WOTC, state level credits, but that's really a thing of the past. Now we have programs that mirror some of the WOTC categories. In the case of New York, there are 18 qualifying criteria for eligibility with the New York Youth Jobs Program. And the name of the credit's a bit of a misnomer because the age range for the credit is between the ages of 16 and 24.

The reality is you look at anybody up to the age of 25 that lives in the state of New York and they have to be certified by the state Department of Labor for the program. And the business that wants to take advantage of the credit has to be certified as well. Again, we talked about the New York State Department of Labor regarding the state as a state workforce agency for Watse purposes. They have an entirely different department that manages just this credit and they certify this credit and it's refundable. So unlike Watse and many of the other state level credits that aren't refundable, in other words, you have to have liability to take advantage of the credit or to be able to utilize it, this credit is refundable. So you can monetize it pretty quickly. So the age range is wide, 16 to 24. Again, I think anybody below the age of 25.

So if you're hiring college graduates and folks that in New York state, this is a credit to consider. When it was first established, it was a very narrow credit. You had to live within five cities in New York State, like Buffalo, Syracuse, Hempstead. It was very narrow, very specific. But a few years ago they expanded the credit to be statewide. They eliminated that residential restriction. And again, it's available for people within 18 categories, which are, again, much more broad than the target groups in Watse, but it can be as much as consideration of being underemployed prior to taking on this new job. So the important thing about it is one, the refundability. Two, the individuals need to be certified. Three, the business needs to be certified. But to the question that we had earlier about can you submit for 2026 new hires from the beginning of the year, while you can't right now for Watsey, or hopefully you'll be able to, but we don't know yet, you can for New York.

So for this New York youth program, if you employ people in the state and they fall under the age of 25, there's a possibility that you can retroactively certify for this credit. As long as you get the business certified by the end of November, you basically have until the end of December to file the paperwork on the individual new hires that fit the categories. Again, the questions that we present to the employer or to the employee, excuse me, are integrated into the Watse process. So usually we're screening for Watse and for this credit at the same time, but so many of the credit questions overlap that it doesn't really add much to the timing it takes to complete the questionnaire. In other words, an individual answering questions for Watse in New Jersey, it might take a few minutes. It's not going to take much more than a minute, I guess I would say.

Abe, you can correct me on that, but to answer the questions for New York youth. The reason I say that is because sometimes when you're looking at it from an HR perspective, you don't want that onboarding process to be lengthened and to make it an unpleasant experience. So when you're looking at the combination of asking the questions for Watse and New York youth, I think it's done pretty seamlessly, especially because the questions are so similar to each other. The potential credit for the New York Youth Program is significant. It's up to $7,500 over a two-year period for a qualified individual. And the driver to the credit is length of employment. Are you a full-time hire? And if you are, if an individual ends up being a full-time hire and works up to two years and is qualified for the credit, the max credit is going to be $7,500.

Again, refundable. Part-time employee, half that. But you can get a partial credit. You can be qualified and only work a couple months and that individual's still going to generate credit for you. So it's really nice in that regard. You don't have the same timing considerations. You don't have that 28-day window. You have the ability to go back within this current year in order to see if you've missed anything. And the credit's going to be available through 2027. And you never know, it could be extended. This credit has been extended once already and it's been expanded, so it's been very popular. The other thing that's really good about this program is that the state provides the certification, the state provides the calculation. So if any of you are familiar with New York State credits these days, they like to have a certificate provided and included in the tax return filing, and the state Department of Labor provides that.

So you're not really having the same paper chase with this credit that we do have with Watsey, but the value is significant. There are other states that have a state level credit, maybe not to this value, but it is worthwhile. If you're not already evaluating state credits, the state credits that you might be eligible for if you're already screening for Watsey, it's worthwhile to take a look and see what might be available within your state.

I'm not going to say it's the same windfall. Not every state offers a state credit. Some of the state credits are, I don't know, a process to secure. So New York has the youth program, they have a veteran credit, they have a TANF, I think it's a disability credit. I think they have a TANF credit. I mean, there are a zillion credits in New York State as an example, but the process for qualifying for those is so much different. They have to be evaluated on a case by case basis. But the windfall can be significant. And that's where we say that it's really important. If you're using Watsey already, it's a tool for identifying other opportunities.

Veterans credits, since 2012, veterans credits have really been a significant area of expansion for states where they've offered different programs. They don't mirror WOTC, unfortunately. They don't offer Nuance, but they should be evaluated. If you're seeing veterans pop up as you're qualifying folks for Watsey, you should be looking to see if there's a state credit that's similar, that maybe you're missing out on. I think, okay, let's move on to the next. Okay. So we've got polling question number four. Which additional incentives would you most like to explore? So A, state hiring credits, B, location based incentives, C, R&D tax credit, or D, cost segregation. So while we wait for answers to come in, I'll say we look at hiring credits and location based incentives differently. State hiring credits, I think about New York Youth, you don't have to have a particular location, your employees have to meet a certain criteria.

But location based incentives, they tend to be those that require growth, net growth. And that's the beauty of WOTC and even New York Youth. You don't need net growth to qualify, but a location based incentives typically do. You need to say, "We had a baseline headcount of X and our target growth is going to be Y." And then you have to apply and prove that you hit Y in order to realize the benefit. So that's one of the other really nice things about WOTC is that you don't have to have net growth in order to benefit from it. So we're getting there. We've got - It

Justin Zucca: Looks like we have 70% of the answers, so a couple, like 20 more seconds.

Annette Fago: The other thing I'll mention while we wait to get some answers in is the, because this is the all important fourth question, if you miss the first and you need to get three. So why don't we bring up R&D? I'm going to bring up R&D here because there's an interplay between Watse and R&D, and that's on the wage side. So basically companies can take advantage of both credits, you just can't take advantage of the wages on both sides. So there's a wage calculation that has to be considered. So there's interplay on the federal side with credits. They've legislated to prevent you from basically, in their view, I guess double dipping, taking advantage of credit with the wage benefit on Watsey and/or R&D or others. So that's something to take into consideration if you're claiming both Watse and R&D and whoever your provider should be doing that automatically.

Looks like

Justin Zucca: We've

Annette Fago: Slowed down.

Justin Zucca: Okay. Did you want to talk to that, Annette?

Annette Fago: Yeah, no, I think they're all worth evaluating. There's interplay, like I said, with all of them, with most of them. Obviously Costseg is a different animal, but there's interplay and it's important to take a moment. It's a good time of the year also to take a look at what your plans are going to be going forward. Will there be growth, net growth? Will it just be replacement jobs, things like that? So tahis is a good time of year. If you're not claiming Watse already, you should maybe consider it even, like I said, during this hiatus period. So this is good information. Thank you.

Justin Zucca: Yeah. And I think I'll just wrap it up as when you think of the work opportunity tax credit, really, when you look at this slide, it's bottom up. I mean, you're putting in a system that essentially is future-proofing yourself for other state hiring credits, location-based incentives. A lot of these programs, like Annette and Ave mentioned, they're looking at people, they're looking at data, they're looking at wages, they're looking at hours. Each state is going to have their own demands and requests and their own data that they're going to want to collect. And by essentially putting the framework in place for the work opportunity tax credit, programs like the New York Youth Credit become much more simpler to implement. Programs like the Maryland credit become a lot simpler. So yeah, I guess we would close on that. Annette, was there any last things that you wanted to touch based on?

Annette Fago: No. I guess maybe one thing, which is we didn't really talk in depth about the proposal that Congress is going to take up after the midterms. The bill is the improve and enhance the Work Opportunity Tax Credit Act. Now we don't know if this is going to be what's considered after the midterms, but it's what has received the most support so far. They've had some folks join on as signatures over the summer, but it provides a five year extension of the credit. So it'd be extended through December 31 of 2030. They'd expand the credit, they'd make it larger. So the credit percentage, the main credit percentage that we're targeting is 40%, right? The folks that are working 400 or more hours, that percentage would go from 40 to 50. So basically, potentially doubling the credit because at the same time, they're proposing increasing the wage cap.

So you could see a wage cap go from $6,000 to $12,000. They're really trying to change the trajectory of the credit, I think, to be focused more on long-term hires. They're also proposing changes on wage limits for veterans. So basically creating a larger opportunity for folks hiring veterans. There's also a version of the bill that... I think there was another bill out there that considered expanding the credit to include military spouses. So a different proposal, I'm not sure it really got the traction that folks hoped for, but it just gives an indication of how widespread the support of the credit is. Credit, like I said at the beginning, has expanded in terms of the length of the benefit, the breadth of the benefit, and we don't see that stopping.

Justin Zucca: Well, thank you. And everybody, thanks for hopping on. Astrid, was there anything else you needed for us to close this out? Nope. Okay. Well, I appreciate everybody hopping on. Thanks for spending time learning more about the work opportunity tax credit. And if there's any questions, please feel free to email us, send them to us through this webinar platform and yeah. There you go, Astrid.

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