The Work Opportunity Tax Credit (WOTC) provides a federal tax income benefit for businesses who hire individuals from specific target populations.  Provided as an incentive, businesses are offered a tax credit for each qualified new jobseeker; thereby, reducing their federal tax liability with each qualified hire. Tax credits range from $2,400 to $9,600, depending on the employee hired. 

 The WOTC has been a win-win-win experience, said Roger Blau, Ph,D., vice president of  DP Professionals in Columbia.

“Our company’s business is information technology staffing, and we are always searching for the best talent available to meet our client’s needs,” he said. “To be able to hire veterans to work at our client’s worksites has been beneficial for the individuals, for our clients and for us. 

The qualifying target populations include:

• Temporary Assistance for Needy Families (TANF) Recipient – $2,400
• Recently Released Ex-felons -$2,400
• Designated Community Resident – $2,400
• Vocational Rehabilitation  Client – $2,400
• Supplemental Nutritional Assistance (SNAP) Recipient – $2,400
• Supplemental Security Income Recipient – $2,400
• Long-Term Family Assistance (TANF) Recipient – $9,000
• Veteran Unemployed four weeks – $2,400
• Veteran Unemployed six or more months – $5,600
• Recently Discharged Disabled Veteran – $4,800
• Disabled Veteran Unemployed six or more months $9,600

Sponsored by the U.S. Department of Labor, the WOTC program is administered by the South Carolina Department of Employment and Workforce (DEW). 

Though the WOTC office receives more than 250 tax credit requests per day, automation allows for receipt of certification within one week of submission. This allowed for the release of more than 18,500 certifications within days of legislative program reauthorization on January 1, 2013.    

In fact, in the past 12 months the WOTC office has issued a total of 46,657 certifications, representing in excess of  $128 million in federal tax savings to businesses in South Carolina.

 “For our company to receive a tax benefit is just the cherry on the cupcake,” Blau said.  “We are proud to have these veterans as our employees.”

For Roger Alley, owner of Blackstone Café in Beaufort “the tax credit helps a lot in keeping us profitable and is a good incentive for hiring from the targeted groups.”

“As a tax payer, I greatly appreciate it,” he concluded.

To learn more about how your business can take advantage of the Work Opportunity Tax Credit program,contact Laura Rushton, stateWOTC coordinator, at 803-737-2592 or lrushton@dew.sc.gov.

 If you would like to electronically file your tax credit requests,  view the employer page here and the third-party consultant page here.

Agency to Avoid Higher Federal Taxes for Business

The SC Department of Employment and Workforce (DEW) in May voluntarily repaid $144 million to the federal government for the agency’s unemployment trust fund loan.

Making the payment early saves the state more than $1.7 million in interest costs.

For the past three years, South Carolina has made early, voluntary payments on the trust fund loan and has subsequently avoided higher federal unemployment taxes for its businesses.

States that borrowed money from the federal government must meet several criteria to avoid a Federal Unemployment Tax Act (FUTA) credit reduction for their employers. Making advance loan payments is one of the requirements, and South Carolina last month submitted its initial application to avoid FUTA credit reduction for 2013.

In fact, the Palmetto State was the only borrowing state in 2012 to receive approval from the U.S. Department of Labor (DOL) to avoid the higher federal unemployment taxes.

To date, South Carolina has repaid more than $300 million of the $977 million initially borrowed from the federal government. After the 2013 loan repayment of $144 million, the outstanding balance will be approximately $530 million. The agency also plans to make a $50 million payment in September. The state is scheduled to repay the entire loan amount by the end of 2015.

The Internal Revenue Service will publish a list of credit reduction states after DOL makes its certifications in November and will have additional information available about completing the federal 940 tax forms.

FUTA Background

Employers pay federal unemployment taxes on the first $7,000 of each worker’s annual wages. The FUTA tax for 2013 is a flat 6 percent. However, businesses that pay their state unemployment taxes on time and in full can receive up to a 5.4 percent credit if the state is not subject to any credit reductions. Therefore the net FUTA tax rate is typically 0.6 percent.

Credit Reduction: What it Means

Federal law requires a reduction in the FUTA tax credit when a state has outstanding federal unemployment loans for two years and has not made sufficient voluntary payments towards the loan. The reduction in the tax credit is 0.3 percent for the first year and an additional 0.3 percent for each succeeding year until the loan is repaid or other criteria are met. South Carolina avoided credit reduction in both 2012 and 2011.

Veterans make up approximately 7.7 percent of the national workforce, and the number continues to rise as thousands of servicemen and women are returning home from overseas.

As more and more businesses join the initiative to hire veterans, now is the time to consider it yourself.

Servicemen and women are an asset to any major corporation or small business because they often possess a set of skills and qualifications that meet the high demands of a fast paced, global economy.

Such attributes include:

• Veterans come from highly skilled and highly trained backgrounds.
• Veterans are technical and innovative thinkers.
• Veterans possess an excellent work ethic.
• Veterans come with several federal tax incentives.
• Veterans are accustomed to working under pressure and some in life threating and dangerous situations.
• Veterans are problem solvers.
• Veterans are able to work in a team setting and can also assume leadership roles.
• Veterans are familiar with working with a diverse group of individuals or in a diverse working environment.

If you are interested in hiring a veteran, contact your local SC Works center to speak with a veterans’ representative who can connect you to this highly talented workforce.  

Contributing writer:  Stephanie Lovett, Disabled Veterans Outreach Program Representative at the Aiken SC Works center.

Joyce Driggers’ secret weapon is Scotch tape.

She keeps a roll stashed in her car’s glove box at all times. One of the most important things she’s learned during her years as a tax field deputy? You’ve got to always be prepared.

She knocks on doors of employers throughout Richland, Lexington and Calhoun counties in her efforts to deliver subpoenas for Wage and Contribution reports and accompanying records. Sometimes employers don’t answer or are not around so Driggers tapes an envelope holding the subpoena and her business card to the door.  Over the years, she’s found this to be an effective technique as it ensures that individuals see the paperwork.

Driggers, Columbia district manager for Field Services, is one of 31 field deputies throughout the state that work to foster employer understanding about what the unemployment insurance law requires and maintain a good relationship between DEW and businesses. The Field Services Division’s purpose is to protect the UI program’s integrity by working with all businesses.

They are responsible for securing delinquent Wage and Contribution reports, conducting audits, conducting wage investigations, and making changes in status of an employer’s account. They also assist in presenting monthly Small Business Tax Workshops with the Internal Revenue Service and the SC Department of Revenue. Check out the schedule of upcoming sessions and locations here.

“We have to be accountants and work with facts and figures,” said Driggers. “We have to be attorneys and know the law. We have to be a private detective. We’re also kind of public relations because we’re out there on the front lines. We are friendly but firm. You have to know how to relate to people in all walks of life.”

Bottled water and power bars are other essentials in her toolbox, said Driggers, who travels the backroads of Irmo, Chapin and Lexington County most days.

On a recent June morning, she began her rounds delivering subpoenas in the St. Andrews area, worked her way through the heart of Irmo, continued the journey into the county and through downtown Lexington. She knocked on doors, taped paperwork to doors and windows, talked to neighbors, left word with employees and even collected some reports that had been promised to her.

She later reported that she heard back and received paperwork and information from all but one of the employers she was seeking out that particular day. 

“With time you spot trends and learn how to deal with people,” said Driggers who explained that 90 percent of the employers she encounters are nice and very easy to work with.

However, there are some challenges. For example, being a field deputy is not an 8:30 a.m. to 5 p.m. job. When’s the best time to find a roofer in May? Try 5 a.m., says Driggers. Or the owner of a pool hall? You have to stop by after 6.

“Everyone of us has had adventures,” she said with a laugh. 

Driggers said she loves the variety her job offers.

“Every single day is something new,” she said.

Ronnie Clamp, manager of the state Field Services Division who served as a field deputy for 20 years, agrees.

“The cool thing about being a field deputy is you deal with accountants, attorneys and employers,” he said. “And to me the most interesting part was getting out and talking to them about their businesses and the different creative ideas people had for starting businesses.”

Learn more about Field Services and how to reach your local contact here.

The South Carolina Workforce Investment Board (SWIB) hosted its 15^th annual Partnership Symposium, May 13-15 at the Westin Hilton Head on Hilton Head Island.

The Symposium served as an opportunity to honor business leaders for their impact on the development of the Palmetto State’s workforce and offered an opportunity for attendees to learn tips about how to help businesses succeed by providing them with a skilled workforce. The conference theme was Building Blocks for Business Success Through Workforce Development.

Each year, the SWIB recognizes outstanding businesses, volunteers, Local Workforce Investment Boards (LWIB), and SC Works Centers.  Awards are also given to Workforce Investment Act (WIA) participants from local workforce investment areas (LWIAs) around the state, acknowledging them for their diligence and perseverance in overcoming obstacles to complete training and obtain self-sustaining employment.  This year’s SWIB honorees included:

• WIA Youth Achievement – Latoya Monroe (Trident LWIA) and Deanna Nowlin (Pee Dee LWIA)
• Outstanding WIA Alumnus – Katina Dansby (Upper Savannah LWIA) and Frank Duncan (Upstate LWIA)
• Outstanding Workforce System Partner – Florence County Library System (Pee Dee LWIA) and Carl Streeter, SCDEW Local Veterans’ Employment Representative (Trident LWIA)
• Outstanding Business Partner – WEB Electric (Santee-Lynches LWIA) and Viva Recycling of SC (Trident LWIA)
• Outstanding SC Works Center – SC Works Dorchester (Trident LWIA) and SC Works Cherokee (Upstate LWIA)
• Outstanding SC Works System Local Employee – Lynn Hall, SC Works Cherokee (Upstate LWIA)
• Outstanding SC Works System State Employee – Pat Sherlock, Workforce Development Director (SCDEW) and Mary jo Schmick, Local Operations Manager (SCDEW)
• Outstanding Local Workforce Investment Board – Pee Dee LWIB
• Outstanding LWIB Member – Reginald Murphy (Midlands LWIB)
• Workforce Development Lifetime Commitment (posthumous) – Danny E. Allen (Upstate LWIB)
• Outstanding SWIB Member – R. Michael Johnson, Cox Industries

During the SC Workforce Investment Board Partnership Symposium, three businesses were also recognized. The following employers received the Palmetto Workforce Partnership Award which acknowledges S.C. businesses for the jobs they provide and the many contributions they make to their local communities:

• Small Business Winner (0 – 50 Employees):  Sportsman Boats Manufacturing (Trident LWIA)
• Medium Business Winner (51 – 500 Employees): The Urban Electric Company of North Charleston (Trident LWIA)
• Large Business Winner (501+ Employees):  Cooper Standard – Spartanburg Plant (Upstate LWIA)

All awardees were presented with a plaque and poster to commemorate their accomplishments.

The SWIB is a 31-member board appointed by the governor and includes business leaders, members of the General Assembly, local elected officials, workforce partners and representatives of community-based organizations. The goal of the SWIB is to create a competitive workforce advantage for South Carolina by ensuring that a quality and effective workforce system exists in order to improve the lives of all South Carolinians.

A new law signed by Gov. Nikki Haley last month will improve the integrity of South Carolina’s unemployment insurance system.

The legislation (H.3751, Act 70), which imposes federally mandated requirements, includes the following:

• A 25 percent penalty will be applied to a claimant’s fraudulent overpayment;

• If an employer establishes a pattern of non-response, and overpayments result due to the non-responses, then the employer’s account may be charged. (The SC Department of Employment and Workforce will release further information and educational materials for all employers covering this topic);

• A revision to the definition of “new hire.”

“These measures will ultimately help restore the unemployment insurance trust fund and keep future unemployment taxes low for the state’s businesses,” Haley said in a release announcing the legislation.

The new law applies to overpayments determined by the agency after October 21, 2013.

DEW is committed to a multi-pronged marketing campaign to explain the new requirements to all businesses in the state. Only businesses that demonstrate a pattern of responding in an inadequate or untimely manner will be at risk of increasing their unemployment tax rates.

The agency is optimistic that this required change will reduce the number of overpayments associated with separation issues, which accounted for 33 percent of all overpayments in calendar year 2012.

Save time by responding via SCBOS

Businesses are encouraged to use South Carolina Business One Stop (SCBOS) to respond to DEW’s fact finding inquiries regarding claims. This electronic response system reduces the probability of missing claims due to mailing issues and also allows businesses to respond faster from any computer in the world. Electronic responses are received by the agency significantly faster than traditional paper responses.

Learn more about SCBOS and sign up for a free account here. To get answers to some common questions about DEW-related filings, visit this page.

You can also take advantage of free online classes that explain the step-by-step process for filing with SCBOS. Check out the calendar of upcoming sessions.

SCBOS’s Help Center will take your questions from 8:30 a.m. to 4:45 p.m. Mondays through Fridays.

Call 803.898.5690 or visit this page to email or live chat with a representative.

 Improving the Crystal Ball

Each year, the South Carolina Department of Employment and Workforce (DEW) estimates industry employment changes occurring throughout the state’s 12 workforce investment areas.

In years past, DEW’s Labor Market Information Department (LMI) used federally mandated projections software to develop industry projections. These projections use many different data sources and mathematical models to make an educated prediction. However, LMI realized that this data could be greatly improved by bringing in local perspectives.

LMI invited local workforce area representatives, educators and economic developers to review industry projections and share their first-hand knowledge of expansions, new businesses, layoffs, and hard-to-fill jobs to make sure that what comes out of the projections are as accurate as possible.

“This is the first time an attempt was made to ensure locals were given the opportunity to add input in an in-person, one-day review process,” said Brenda Lisbon, LMI director.

The most recent report lists occupational and industry projections for the 2010-2020 time frame.

Utilizing the Crystal Ball

Projections can be useful to many audiences including economic developers and employers.

Economic development professionals use employment projections throughout their daily activities. They rely on projections to identify and understand future economic trends. Based on these understandings they can prioritize the most important economic development activities and allocate resources efficiently.

Employers may find employment projections useful when making decisions about where to focus their resources when considering decisions like relocating, building new sites or making expansion plans.  New employers may use this data to know how their staffing patterns relate to current and future trends.

Check out these highlights from this year’s industry and occupational projections for the health care and social assistance industry.

 Want to know more? Check out the most recent industry and occupational projections under the Employment and Wage data tab here.

Second quarter Wage and Contribution reports and tax payments are due July 31.

We offer two convenient methods for you to file online through either SC Business One Stop (SCBOS) or the South Carolina Automated Tax System.

DEW encourages all single account filers to use SCBOS. Filing with SCBOS will also allow you to pay your taxes electronically. Please call 803.898.5690 or contact the SCBOS Help Desk if you need assistance navigating through the SCBOS system.

For more information about filing Wage and Contribution Reports click here.

Got a question about your Quarterly Wage and Contribution reports? Need more information about the statement you received in the mail?

Representatives at DEW’s Tax Division in Columbia can be reached by calling 803.737.2400, Option 3.  You may also send an email to UI-Tax@dew.sc.gov.

Our team is available from 8:30 a.m. to 4 p.m. weekdays to answer questions about your account and provide up-to-date information.

Get a general overview of unemployment taxes by visiting this page. Learn about submitting reports and payments electronically through SC Business Onestop (SCBOS) here.

Filing your Quarterly Contribution and Wage reports with DEW soon will be even easier thanks to a series of new features on SC Business One Stop (SCBOS).

Starting in June, you will be able to schedule an electronic funds withdrawal for unemployment tax payments. This feature enables you to complete the filing in advance and schedule payment on the appropriate date.

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