Tax Credits are a Partnership between Agencies

The WOTC is a partnership between two agencies, the IRS and the Department of Labor. It’s a hiring credit, it’s an incentive to hire people who have structural unemployment. They have historically high unemployment rates.

Because qualifying for tax credit often involves two government agencies there are additional regulations and procedures involved. The certifying agencies, like the Department of Labor or Energy, are subject matter experts and not tax experts. The IRS is not a subject matter expert in labor (in the case of the Department of Labor tax credits) and yet enforce rules about tax credits. Needless to say, the government relations in support of tax credit program work can be quite involved.

An energy credit would be a partnership between the Department of Energy and the IRS. The real estate credits for refurbishing dilapidated buildings is a HUD credit with the IRS. So it’s always a partnership and yet a government benefit has to do with a social good that you’re doing leads to a financial good for your company. It has to be verified by the IRS. Oh they have their rules, and then the partnering agency has to create their own regulations and rules.

And, one of the complications of a tax credit or tax incentive is that those two parts of the tax credit don’t always talk to each other. They may eventually talk to each other. We have to give them credit for that but maybe not … Maybe that hasn’t happened by the time that you’re concerned about what the answer is to all your questions.

Mckenzie Chase Management’s mission enables greater partnership between business and government by making tax credits as easy as possible to capture with proven processes and 35 years experience in government relations, tax credit regulations and knowing how to take care of red tape so you don’t have to.

Download the White Paper about the “Eight Things You Need to Know about Employer Tax Credits”..

OR, find out, from an expert, if you qualify for Employer Incentives on this page.

If you wish to comment on this discussion please fill out the form below. Any identifying information you provide is optional. We reserve the right to remove any post we believe is offensive and unproductive to the conversation. We are here to start a thoughtful dialog and a positive support community.


I agree to the Terms & Conditions.