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Tax Credit Process

Samantha Joseph Patterson -

The following information relates to the integration with Neon TaxBreak for Tax Credit Processing. 

Managers will also need to complete training with Neon TaxBreak directly. 

 

Job Application

  • Your organization's administrator sets up the system to screen applicants for tax credits on the job application. The applicant is presented with the Tax Credit Questionnaire (TCQ). 
    • The TCQ portion of the application is completely voluntary and cannot be required.

Tax_Credits_Application.png

 

Applicants

In the Applicant Pool, Managers can view the individual's Tax Credit Status in two ways by using the Advanced filter or the Tax Credits symbol (which is the Dollar Sign symbol).

Note the following statuses during the applicant phase:

  • Not Pre-Screened ($ with ?) - Applicant opted out of answering the TCQ.
  • Pre-Qualified ($ with ✔) - Applicant answered the TCQ and might be qualified based on the information they provided.
  • Not Pre-Qualified ($ with x) - Applicant answered the TCQ and is not qualified based on the information they provided.

Tax_Credits_Applicant_Pool.png

 

Employee Onboarding

  • Your organization's administrator will screen new hires for tax credits during onboarding. The new hire is presented with the Tax Credit Questionnaire (TCQ). 
    • The TCQ portion of onboarding is completely voluntary and cannot be required.

Tax_Credits_Onboarding.png

 

Onboarding Tab - Tax Credits

In the Team Member's record, Managers can click the Onboarding tab to view and take action on Tax Credits. 

Tax_Credits_Onboarding_Tab.png

 

  • Not Pre-Screened or Pre-Qualified
    • These appear if the new hire opted out of the TCQ during onboarding.
    • The Manager clicks Request TCQ Completion.  An email is sent to the new hire. 
    • The new hire will see You have a questionnaire to complete when they log in to their PeopleMatter account. 

Tax_Credits_Not_Prescreened.png

 

  • Qualified
    • This appears if the new hire submitted the TCQ during onboarding and is eligible.
    • The Manager clicks Download the instructions and follows the steps listed to submit Proof of Age and Residencey Information to Neon Tax Break. 

Tax_Credits_Qualified.png

 

  • Not Qualified:
    • This appears if the new hire submitted the TCQ during onboarding and is not eligible.
    • There is nothing else for the Manager to do. 

Tax_Credits_Not_Qualified.png

 

Statuses:

In the screens as shown above, there are four statuses that can be seen:

  • Needs Forms: The new hire needs to finish onboarding and complete tax credit forms with an electronic signature, which is required on the TCQ and Form 8850. 
  • Closed: The new hire is no longer eligible for tax credits. (Examples: misinformation, worked for less than 120 hours, etc.)
  • Pending: The State WOTC Office is still reviewing the case. (This can take upwards of a year to two years depending on the state.)
  • Certified: The WOTC Office approved the case and Neon TaxBreak is actively calculating the credits once a 120 hour threshold is met. 

 

Additional Information on Forms:

Information is sent to Neon TaxBreak as soon as the new hire clicks Next in onboarding or submits the TCQ and fills out the Form 8850.

  • Form 8850: Pre-Screening Notice and Certification Request for the Work Opportunity Credit, which must be electronically signed during onboarding.
  • TCQ: Filled out during onboarding and maps into the form for Neon TaxBreak.

The new hire can view their forms within their PeopleMatter WorkFile. 

 

Submit Information to Neon TaxBreak:

Managers submit Proof of Age and Proof of Residency for Qualified candidates to Neon TaxBreak directly.  

  • This is not done within PeopleMatter. 
  • This information is submitted by mail, email, or using the Neon TaxBreak Mobile App. (See attachments below for information on the TaxBreak Mobile App.)
  • Once Neon TaxBreak receives the forms, there may be additional information required to fully certify the tax credits.  Neon TaxBreak will guide Managers if more information is needed.

Tax_Credits_Chart.png

Reports and Additional Information:

  • Monday - Clients receive a Priority Report from Neon TaxBreak that lists any new hire that has not done paperwork.
  • Wednesday - Clients receive a Missing Information Report from Neon TaxBreak that asks for supporting information, such as proof of age and residency or any information not answered.
    • Missing Information shows as a "To Do" Item in PeopleMatter, but Managers need to submit the information directly to TaxBreak.
  • After all information is gathered, Neon TaxBreak sends the forms and all collected data to the State WOTC Office where the employee awaits "Certification."
    • Shows as "Pending" in PeopleMatter.
    • Can take a long time depending on the state, such as a year.
  • The client is sent a monthly report and an annual report from Neon TaxBreak that provides information for taxes. 
    • Clients may file taxes with the yearly report or quarterly using the monthly report depending on their own personal tax practices.
    • There are two categories worth up to $9,600 and additional categories worth up to $2,400 in tax credits. A client may receive less credit as the credit is dependent on a percentage of what they pay the employee and how much time is worked. 
      • During implementation, Neon TaxBreak is given payroll information and continues to receive it on a monthly basis from the client directly or via an SFTP site.
      • The client receives tax credits:
        • Not money
        • Not a deduction
  • Neon TaxBreak will require your organization to provide payroll files.
  • Rehires to an organization cannot go through the Tax Credit Process again. Tax credits are a one-time offer per employee. 

Managers will need to complete training with Neon TaxBreak directly.

 

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