(There are times when the CEO clients, in the course of their employment search, can present two incentives for the employer’s consideration. The first is a fiscal incentive and the second is provides a measure of security in the early stages of a new hire. CEO Clients usually do not routinely present these programs because often they simply are not necessary towards influencing an employer’s decision to hire. But, in some circumstances, these programs do advance the potential to secure employment. )
Work Opportunity Tax Credit
The Work Opportunity Tax Credit (WOTC) is a federal income tax credit for employers that hire people with a felony conviction within one year of release from incarceration. The tax credit is 40% of qualified wages for employees that work 400 or more hours during the first year of employment or 25%, tor new hires employed 720 to 399 hours. Since qualified wages are capped at $5,000, this tax credit is worth up to $2,400 for each qualified employee’s first year of employment following release from incarceration.
Employers must first register with the Colorado Department of Labor and Employment at wotc.cdle.org/. Employers also need to submit IRS form 8850 and Department of Labor ETA Form 9061 within 28 days of the employee’s start date to the Colorado Department of Labor & Employment, WOTC Unit, 633 17th Street, Suite 700, Denver, CO 80202.
Information about the WOTC and links to the required forms are online at http://www.colorado.gov/cdle/taxcredits.
Employers may call the WOTC Unit at 303.318.8845 for information and assistance with the forms.
Federal Bonding Program
The United States Department of Labor will provide a $5,000 Fidelity Bond for at-risk individuals defined as having a record of arrest conviction or incarceration (among others), for free to an employer for the employee’s first six months of hire.
The bond insures the employer for theft, forgery, larceny, or embezzlement. The employee may be hired on a seasonal, part time, or full time basis.
Employers may contact the state office where the program is administered for information and help with the certification form.
Additional information can be found online at http://www.colorado.gov/CDlE. Click Employers, then Federal Bonding, under the heading Incentives I Tax Credits.