Unlocking The Potential Of Work Opportunity Tax Credits And Employer Credits With Eric Kneller

Brought to you by Salim Omar and the CPA Marketing Genius Podcast, and his special guest Eric Kneller.  Kneller teaches CPA firm owners how they can help their clients save money, double their profits as well as their take-home pay.

Meet Eric Kneller

Eric Kneller has over 15 years of experience in sourcing and supply chain management for multinational companies. His main passion is helping companies save money.

"I work with CPA firm owners in two ways, by starting a relationship with the firm directly or by connecting with the firm through their clients," says Kneller. 

He works alongside his CPA firms and provides positive reinforcement of the services they already offer.

"During the discovery I list out all the potential specialized tax incentives that the client may qualify for based on their area of business and location. 9 out of 10 businesses are stepping over money that they don't even know is available to them," says Kneller.

Background

The Work Opportunity Tax Credit (WOTC) Program and How it Can Benefit Small Businesses

"The Work Opportunity Tax Credit program is a federal tax credit that incentivizes employers to hire individuals from certain disadvantaged groups, including veterans, ex-felons, food stamp recipients, and others. The credit can range from $2,400 to $9,600 per eligible hire, depending on the individual's circumstances and the length of their employment," says Kneller. 

Kneller advises that for small businesses, this program can be a valuable tool for reducing their tax liability and saving money on hiring costs. By screening all of their candidates for WOTC eligibility, small businesses can identify those who qualify for the credit and take advantage of the savings. 



Additionally, by offering the WOTC to eligible candidates, small businesses can enhance their reputation as socially responsible employers, attract and retain top talent, and contribute to the overall well-being of the community.

Employer Retention Credit

"The Employer Retention credit (ERC), which is a credit offered by the government as a response to COVID-19 and the CARES Act is worth $26,000 per employee, and it is calculated as $21,000 for three quarters of 2021 and $5,000 in total for 2020," says Kneller.

"The eligibility criteria for the ERC have changed multiple times, and many CPAs initially turned off to the ERC because they believed that businesses that received the Paycheck Protection Program (PPP) loan were not eligible. However, the rules have since changed, and many businesses that received PPP loans are now eligible for the ERC," says Kneller.

He mentions that it is important to approach the ERC with caution as there are a lot of affiliates promoting it as "free money." Kneller stresses the importance of proper documentation and calculation of the credit, and warns against working with third-party companies that might take payment up front and disappear offshore. He also adds for businesses who need the money now, there are firms that will buy the credit for a reduced amount but the business will receive the money sooner.

Tax Credits That Are Often Overlooked By Businesses

These are the Research and Development (R&D) tax credit and the Property Improvement Cost Segregation Study. "R&D tax credits are available for businesses that are making improvements to their systems, processes, and technologies, even if it may not seem like "research" in the traditional sense. The credit can be claimed for the past three years, with interest, and can be an ongoing credit going forward if the same type of work is being performed," explains Kneller.



A Property Improvement Cost Segregation Study is another tax credit that is often overlooked. This credit is available to businesses that own property and are making ongoing investments to maintain or improve the property. By conducting a cost segregation study, it is possible to reduce the taxes owed by the business by reclassifying certain property components as personal property, which can be depreciated over a shorter period of time.

Final Words of Wisdom

"By offering additional services and being proactive in identifying tax credits and opportunities for your clients, you are not only helping them save money, but you are also building a deeper relationship and becoming a trusted advisor to them. When you offer value-added services, you can differentiate yourself from other tax professionals and offshore companies. You create a competitive advantage in the marketplace. It's important to understand your clients' business and provide them with relevant advice and guidance to help them succeed," says Kneller.

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Eric Kneller

Eric Kneller has over 15 years of experience in sourcing and supply chain management for multinational companies. His main passion is helping companies save money.