NEA Services

The Work Opportunity Tax Credit (WOTC), Welfare to Work Tax Credit (W2W), and State Tax Incentives (including Enterprise Zones), and other subsidy programs offered by various Federal and State agencies, provide incentives to private sector employers who hire program-eligible candidates.

With the assistance of the professionals on staff with National Employment Associates, companies may recover up to 50% of an eligible new associates' salary cost for a specific portion of his/her employment.

Key points for your consideration:

• Our goal is to maximize the savings available to our clients while eliminating the administrative burden so often associated with these subsidy programs. In addition to our online screening, we utilize a mail-in process, rather than telephone screening, allowing for "mass processing" at new hire orientation. No need to "pass the telephone" from one applicant to the next.
• National Employment Associates offers a full line of revenue recovery programs unlike some consulting firms who specialize in one or two programs.
• The National Employment Associates unique screening process serves to identify program-eligible candidates from the ranks of the applicants resulting in "windfall revenue" to the employer.
• National Employment Associates features representatives assigned to a combination of hiring locations who interface directly with your personnel staff and local agencies. With the ability to assign on-site representation for new job site screening, National Employment Associates is especially effective in maximizing program savings since most states now permit our representatives to complete the program application on location.
• National Employment Associates provides quarterly activity reports featuring line-item detail to designated company personnel as a means of identifying savings and other performance criteria.

WORK OPPORTUNITY TAX CREDIT (WOTC)

The Work Opportunity Tax Credit (WOTC) and it’s predecessor, the Targeted Jobs Tax Credit (TJTC), is a federal incentive to employers to hire economically disadvantaged candidates who may have had difficulty in finding and keeping employment.

The Congress and the administration enacted the Work Opportunity Tax Credit (WOTC). The program "targets" applicants who are receiving Temporary Assistance for Needy Families (TANF), Food Stamps, Vocational Rehabilitation recipients, Veterans of military service, Supplemental Security Income (SSI) and youth between the ages of eighteen and forty years of age.

The WOTC program will reimburse employers up to forty percent (40%) of the first $6000 in wages paid to an eligible employee. The employee's eligibility must be determined on the day or before the day he is offered employment by the Client. National Employment Associates’ unique screening process serves to identify the eligible applicants and assist in their program certification within the time frames mandated by the legislation.

To ensure the employer has ample opportunity to utilize the credits obtained, Congress mandated that unused credits could be carried back one (1) year and forward twenty (20) years, for a total effective period of twenty-one (21) years.

The Work Opportunity Tax Credit represents one of the most generous programs ever written in the tax code. We welcome the opportunity to facilitate the revenue recovery this program offers employers.

STATE TAX INCENTIVES (ENTERPRISE ZONES)

The competition between states to lure employers and, therefore, employment opportunities for their constituents has resulted in very lucrative incentives for employers. These incentives can range from property tax abatement to sales tax and corporate income tax credits. Most lucrative is the Enterprise Zone designation.

The concept of Enterprise Zones was first introduced in Congress in 1981 as prospective Federal legislation, and has been considered in almost every session since then. Originally, the zones were to be Federal in nature with credits and rebates of Federal taxes. The legislation bogged-down in a Congressional dispute over urban versus rural zones and has never been enacted in its original form. Because the concept had great merit, individual states began to view the zones as excellent tools to spur growth in economically deprived.

Since 1982, almost all states have enacted legislation forming enterprise zones. Unfortunately, no model legislation existed before the states took action resulting in a confusing combination of incentives. Criteria for zone designation has generally been formulated from unemployment levels, poverty levels, and population loss statistics.

It is virtually impossible to offer a summary of the typical zone since incentives not only vary from state to state but from zone to zone within the same state. However, it is possible to group the incentives as: tax incentives, capital financing, and miscellaneous relief on improvements.

The National Employment Associates program for State Tax Incentives is designed to maximize corporate savings by ensuring our Clients take full advantage of every potential revenue recovery opportunity offered by the state programs. We maintain a data base of information offered by the states to accurately determine the benefits available.

Our team of professionals will work in close coordination with designated corporate contacts to review incentives available at existing job site locations as well as offer insight concerning incentives available at future site locations. Once identified, we will initiate certification procedures to comply with the state legislative guidelines.

WELFARE TO WORK TAX CREDIT (W2W)

Effective January 1,1998, Congress and the Administration enacted legislation to provide a substantial incentive to employers to hire economically disadvantaged applicants who have participated in long-term family assistance in the form of Aid to Families with Dependent Children (AFDC) or Temporary Assistance to Needy Families (TANF).

The program provides an employer incentive in the form of a federal tax credit equal to 40% of the first $10,000 in qualified wages paid during the first year of employment and 50% of the first $10,000 in qualified wages paid during the second year of employment for a maximum saving to the employer of $9000.

To be eligible, an employer must employ a qualified recipient of Aid to Families with Dependent Children (AFDC) or its successor program, Temporary Assistance to Needy Families (TANF) who has received benefits for at least eighteen (18) months before employment with the employer, or whose eligibility for AFDC/TANF benefits expired under federal or state law after August 5, 1997. The eligible employee must be retained on the employer's payroll for a least 400 hours or 180 days for the employer to earn the credit. Once earned, the employer takes the credit for all wages paid, up to the annual maximum, for wages paid during the initial 400 hours.

Like the other federal job creation tax credit, WOTC, the Welfare to Work program is a credit against federal taxes owed by the employer. An employer can only benefit from one federal subsidy at any given time. Naturally, our role as your consultant in these matters will be to ensure the Client receives the maximum benefit from these programs within the limits of the legislation.

OPERATIONAL METHODOLOGY

Following is an overview of the operational methodology employed on behalf of our clients to recover the savings available through WOTC, and W2W programs:

• Designated National Employment Associates representatives will acquaint job site managers with details of the programs to be administered on their behalf.
• With the assistance of the Human Resources staff, all new applicants are instructed to complete a program eligibility questionnaire, online or hardcopy. Ideally, initial screening would take place as early in the hiring process as possible, but no later than the day of job offer.
• Utilizing a questionnaire, rather than telephone screening, allows for mass processing of an entire orientation class at one time without others in the room overhearing the confidential responses of the applicants.
• Upon completion of the questionnaire, a member of the Human Resources staff would verify the applicants' signature, date the form where appropriate, include wage rate and position and mail the questionnaires in the envelope provided.
• All vouchers and follow-up documentation on behalf of an eligible associate will be handled to completion by the National Employment Associates team of professionals.

State Tax Incentives, including Enterprise Zone benefits, are obtained through close coordination with the designated corporate contact. Working from location lists and employee rosters provided by the corporate staff, National Employment Associates will conduct all research necessary to determine the Client's qualification for tax benefits in states currently offering tax credits, and will keep abreast of any additional programs that may be created in the future which may benefit company.

Specifically, National Employment Associates will perform the following services:

• Review all job site locations to determine program eligibility.
• Install screening systems and procedures to ensure all credits, refunds, and/or deductions are captured for past, present, and future tax years.
• Establish procedures consistent with the current company employment process and within time frames mandated by law for screening all personnel to determine those employees who qualify the company for state tax incentives.
• Track wages of all eligible associates during the life of the employment based credits to secure for company the maximum savings allowed by law.
• Review with the designated corporate contact any planned facility changes to optimize program benefits.
• Review progress periodically by detailed written reports to designated management personnel.

CLIENT ROLE

Our Clients agree to provide National Employment Associates with the information required to secure and compute such credits, deductions, refunds, and reimbursements, including but not limited to the wages paid to each eligible employee, State in which taxes are paid, copies of refund and reimbursement checks received, abatements processed and credits taken through the efforts of National Employment Associates, Inc.

The parties recognize that the claim for which credits, deductions, refunds, and/or reimbursements taken will be subject to future Federal, State, and local review and possible audit. NEA will assist Clients in all reviews, audits, inquiries or other questions raised by any governmental authority with respect to such programs and any certifications or data submitted in connection therewith. Clients assert to NEA the usefulness of such tax credits and/or subsidies to the Client, therefore, NEA will expend its resources to pursue such tax credits and/or subsidies.

FEE SCHEDULE

National Employment Associates fee is contingent upon the savings generated to the Client from their participation in the Worker Opportunity Tax Credit (WOTC), Welfare to Work (W2W), State Tax Incentives, and other employment and training subsidy programs. There are no "retainers" or "up front" fees of any kind.

National Employment Associates, Inc. will present the Client with an invoice at the end of each calendar quarter in which savings were realized by the company.

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