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The WOTC Program has evolved over its almost 20 years in existence as a federal tax credit program. What began as a
paper-based, wet signature required program with photocopies of such back up documentation as driver’s licenses SSI
letters has become, for those able to take advantage of it, software as a service (SAAS).
As with any technological innovation in processing, tax credit savings for participating companies have been enhanced
significantly by the use of advancements in automation, digitization, and electronic exchanges of data. Together these
technologies have enabled the WOTC Program to evolve from a labor intensive, manual process to a software service in
which companies can choose from vendor assisted to self-service subscription processing.
One of the most significant technological advancement in the processing of the WOTC Program has been the acceptance
of the electronic signature for the IRS Form 8850 (“e-8850”). Prior to the introduction of the e-8850, a wet signature was
required, creating a plethora of paper and significant labor needed to process it. The e-8850 has enabled companies to
take advantage of the efficiencies of automation, including increased productivity from online screening for the WOTC
Program. Furthermore, companies are better able to utilize their applicant tracking systems (ATS) to streamline the
recruiting and onboarding process to include the WOTC Program screening. Consequently, eligibility for the WOTC
Program can be determined without human involvement.
Another significant technological advancement in the WOTC Program process has been the creation, expansion, and
integration of state agency databases. Prior to the advancement in state agency databases, companies had to rely on new
hires to provide proof of participation in such programs as TANF and SNAP, two of the largest target groups certified under
the WOTC Program. Additionally, often tax credit opportunities were missed due to new hires not having information
readily available on relatives who may have participated in such social welfare programs. Thus, it was common to miss
out on tax credits.
This advancement in state agency databases has enabled state certifying agencies to confirm the largest target groups in
the WOTC Program – SNAP, TANF, and, in some cases, Veterans – without requiring backup to be provided by the new
hire, further eliminating the need for additional human involvement in 87% of the certifications. Furthermore, as a
consequence of state certifying agencies being able to verify target group eligibility, a larger percentage of individuals are
captured than previously possible, as relatives are captured as well.
Further benefiting the tax credit capture of many firms is the roll out by WOTC coordinating agencies of electronic system
for processing the WOTC Program. While varying in functionality and requirements, these systems enable the processing
of e-8850s and corresponding backup and determination of eligibility electronically, eliminating the need for human
involvement.
Finally, with technological advancements in business intelligence (BI) systems and cloud computing, companies are better
able to manage internal staff, track and hire from potentially eligible pools of applicants, and ensure and maximize
compliance. BI systems with always-on reporting can be used to coordinate the flow of work, focus on ways to increase
the overall credits, and manage labor cost to pursue certifications, while cloud computing provides access o job banks and
talent pools, improving the likelihood of hiring potentially eligible applicants.
Make a Difference in Your Tax Credit Savings with Technology
About WMS
For over three decades, WMS has secured millions of dollars in tax credit and incentives savings for its clients. Comprised of tax specialists with
an average tenure of 16 years, WMS works as an extension of its client’s internal departments to identify, process and execute their full
incentive potential. WMS then administers the identified incentives on behalf of the client. From Fortune 50 to mid-size businesses and small
proprietors, WMS has assisted companies in all industry sectors to generate tax savings through business activities they perform every day:
hiring new employees, expanding or downsizing facility locations, making capital investments, and training new and incumbent workers