AROOSTOOK COUNTY - There is a significant change that could potentially bring thousands of dollars of tax savings to every Aroostook County employer.  In May, legislation was enacted that greatly enhanced the Work Opportunity Tax Credit, allowing businesses to claim a tax credit for up to $2,400 for every eligible individual hired.  Prior to the change, this credit was only available to those that hired specific targeted groups of people between the ages of 18 and 24.  Under the new law, every citizen of Aroostook and Piscataquis County between the ages of 18 and 40 now qualify.  The potential benefit from this change for business owners is tremendous and could save every business owner thousands of dollars in federal income tax. Every business is eligible, including agricultural businesses. 

Certain steps must be taken by the employer to be eligible to claim the credit.  Upon hiring the individual, the employer must submit Forms 8850 and ETA-9061 to the State of Maine within 28 days of the start of employment to certify the individual as eligible.  This step is essential and cannot be overlooked or the employee will not be eligible and there is no extension to the 28-day time limit.  The employer is also responsible for verifying the eligibility of the new employee.  In this case, this means obtaining documentation of their age and address, which can be done by obtaining a copy of their driver’s license.  Although these forms may seem trivial and time consuming they are generally short and simple and the potential benefit far exceeds the time needed to complete the forms.

Therefore, please be advised that you need to complete Forms 8850 and ETA-9061 for every new hire between now and August 2011 and promptly submit them to the State of Maine for certification.  This step cannot wait until tax filing time or the credits cannot be claimed.  Chester M. Kearney, an accounting firm based in Presque Isle and Houlton, advises that when it is time to complete your tax return, that you develop a list of new hires along with copies of Forms 8850, ETA-9061 and certification for that year along with their total hours worked and total earnings.  Your accountant can then calculate the total credit from this information.

Individuals that have worked for the employer previously, owners of the company and their dependents are excluded from the credit, but everyone else is eligible, provided the employee is certified. 

Copies of Form 8850 and ETA-9061 are attached for your convenience.  The completed forms must be mailed within 28 days of the employees start date to:

                                                                                                                         
Susan Turgeon
Bureau of Employment Services
55 STATE HOUSE STATION
AUGUSTA, ME 04333

An opportunity this large and widespread should not be overlooked.  Many employers have received benefits from the Empowerment Zone wage credits but others have not shared these benefits due to the constraints of the Empowerment Zone boundaries.  With this credit, these boundaries do not exist; it is open to everyone within the specified counties.

If you have any questions about this credit or would like assistance, please call your tax advisor.