Operation Underground Railroad

Tim Ballard

Time Ballard with a child rescued by O.U.R.

Today’s post is a little different. Forgive me for parting from the usual tax-incentives news but this is something very important. I hope you’ll see why.

I dare you to click on the picture of Tim Ballard and the little boy he rescued — listen to him tell the true story of what inspired him. Personally, I can’t listen to it without also being overcome by strong feelings.

For some time, I’ve been following a young organization called Operation Underground Railroad.  Known as O.U.R. for short, this organization puts boots on the ground around the world, saving children from the misery of sexual slavery.

In the future, I will write more about O.U.R.’s people, their methods, and the success they are having.  Let me say for now, however, that these people are modern heroes. They are my heroes.

“We’ve gathered the world’s experts in extraction operations and in anti-child trafficking efforts to bring an end to child slavery. O.U.R.’s Underground Jump Team consists of former CIA, Navy SEALs, and Special Ops operatives that lead coordinated identification and extraction efforts.” (link)

The organization’s founder, Tim Ballard, is also OUR’s Jump Team Commander for rescue operations.  He’s former CIA and Department of Homeland Security, where he was assigned to the Internet Crimes Against Children Task Force and an undercover operative for the U.S. Child Sex Tourism Jump Team.

A Modern Underground Railroad: The inspiration for the organization’s name comes from the American anti-slavery movement of the 19th century.  At that time, the historical Underground Railroad was a secret network of safe houses and friends that helped thousands of African American slaves escape from the south into the northern free states and into Canada.

The work Operations Underground Railroad does today is no less important.  Most people are unaware of how massive the illegal slave trade is today and of the misery its victims suffer. The most pitiful are defenseless children. O.U.R., and those who support it financially, are standing up to powerful predators and saving innocent lives.

My business provides employment tax-credit services for employers across the United States. The WOTC Planet is our blog. We’ve made a sponsorship commitment to donate $1 to O.U.R. for each employee we process.  I’m looking for donation partners who would like to join us in supporting O.U.R.’s work. Please contact me if you’d like to find out more about this effort.

email Vaughn Hromiko

Missouri Democrat Proposes State Tax Deduction

Missouri State Representative Michele Kratky has proposed a state tax deduction for small businesses that hire qualifying disabled and previously incarcerated ex-offenders.  The $5,000 deduction can be claimed for up to 3 consecutive years while minimum employment standards are being satisfied.

See the KFVS12 report here.

Find the bill summary and further links here.

Department of Labor Issues Interim WOTC Instructions for State Workforce Agencies

This week, the Department of Labor’s Employment and Training Administration issued new instructions to State Workforce Agencies (SWA’s). Agencies needed instructions in the wake of the WOTC re-authorization provided by the Protecting Americans From Tax Hikes (PATH) Act of 2015. President Obama signed this bill on December 18, 2015.

The document summarizes the program changes and other effects created by the PATH Act.  It also guides SWA’s on what to do with applications that were submitted timely (within 28 days from start of employment) in 2015 during the 49-week WOTC authorization lap.  As a result, employers nationwide should now begin receiving certifications for their 2015 qualifying hires.

While these instructions are important and helpful, we are still awaiting further guidance about WOTC’s newest target group, dubbed “Long Term Unemployment Recipients.”

Also, the IRS has not yet issued a notice about the much anticipated transition relief. In prior years, transition relief has temporarily waived the 28-day application deadline for WOTC applications not submitted timely during the program’s authorization lap. For example, last year we were able to submit applications for 2014 hires, without penalty, all the way through April 30, 2015.

While these instructions do not tell us how to qualify or document employees eligible under the new target group, it does inform us that the Department of Labor and IRS are busy modifying WOTC forms to include the new target group.

Furthermore, employers are “encouraged to postpone certification requests for the New Target Group until the revised forms are available.”  If we just can’t wait, the SWA’s will accept applications for the new target group if employers write “Long-term Unemployment Recipient in the top margin [of the ETA 9061 or 9062], right corner underneath the expiration date.”

You can read the entire document for yourself.

DOL PATH Act 2015 – WOTC Interim Instructions (1.27.16)


(Thank you to Paul Suplizio, President of the WOTC Coalition, for sending us a copy of the ETA’s interim instructions.)

New WOTC Target Group – Long Term Unemployment Recipient

The recent re-authorization and expansion of the Work Opportunity Tax Credit (WOTC) includes a new WOTC target group.  Reading from the statute, a “Long-term Unemployment Recipient” is defined as an individual “being in a period of unemployment which— (A) is not less than 27 consecutive weeks, and (B) includes a period in which the individual was receiving unemployment compensation under State or Federal law.’’

In plain English? To qualify, your new employee must (1) have been unemployed for at least the past 27 weeks; and (2) he or she must have received unemployment compensation at some point during that time period.

This new target group applies only to employees hired after December 31, 2015.  The IRS has not yet issued guidance or provided any further interpretation of the new law.  It’s not yet clear what if any documentation will be required to demonstrate an employee’s eligibility.

President Promptly Signs Government Funding and Tax Extenders Legislation – WOTC Survives through 2019

President Obama signed a huge tax and spending package into law on Friday following congressional votes that avoided a year-end showdown over the budget and ended legislative business until lawmakers return in 2016

Empowerment zones were reauthorized only through 2016.  Interestingly, however, the bill included a provision that expanded empowerment-zone benefits into some census tracts outside of actual zone boundaries.

It’s not yet clear to me if this empowerment-zone expansion will also affect WOTC’s Designated Community Resident target group.

Read about it in USA Today: “President Obama signs massive spending bill, tax measures into law.”


Extenders and Funding Bills Passed by House and Senate

The tax extenders and government funding legislation passed the House and Senate today and is now on its way to the President for his pen.  Of primary interest to WOTC Planet readers is the 5-year extension of the Work Opportunity Tax Credit (WOTC) with Vow to Hire Heroes Act.  These will become law upon receiving the President’s signature.

From USA Today, “Senate clears massive spending bill, tax measures“.

You can read the bill here, at least until they move the file.  For the WOTC extension and revision, scroll to page 38 of the PDF.

Under the 5-year extension, WOTC will be expanded to include a new target group, “Long Term Unemployment Recipients.”  Here’s the language from the bill:

The term ‘qualified long-term unemployment recipient’ means any individual who is certified by the designated local agency as being in a period of unemployment which is not less than 27 consecutive weeks, and includes a period in which the individual was receiving unemployment compensation under State or Federal law.

Based on this language alone (no IRS interpretation available yet), my understanding is that a new employee must be unemployed at the time of hire and the condition of unemployment must have existed for at least the last 27 weeks (which equals one week more than 6 months).  At some point during that 27-week period, the new hire must have received unemployment insurance compensation.

I won’t be surprised if the IRS interprets this to permit one or more short periods of inconsequential employment during the 27-week period (similar to the HIRE Act which required 60 consecutive days of unemployment but still allowed up to 40 hours of work during that period). BUT, that’s just me hoping out loud.

After the President signs this legislation, we anticipate the IRS will issue a notice providing transition relief for employers that did not file timely WOTC application during the program’s 12-month hiatus.

Work Opportunity Tax Credit Informational Notice – Updated Forms Requeired

The Department of Labor has issued Training and Employment Guidance Letter Number 9-15 regarding updated forms. This morning, we received a notice about the update from the Karen Marberry, Minnesota’s Work Opportunity Tax Credit Coordinator. Marberry’s notice is copied below.

Please notice, the ETA 9061 has been renewed without substantive change BUT the Revision Date and Expiration Date have been updated.  Effective February 16, 2016 the new revision of the form must be used and the old revision will no longer be accepted.

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Work Opportunity Tax Credit

Informational Notice

Dear Consultant:

We have been advised by the U.S. Department of Labor to notify employers and consultants participating in the Work Opportunity Tax Credit program the required use of the newly revised ETA Form 9061 (August 2015) for all new hires effective February 16, 2016 and later. We ask that you discontinue using any outdated forms you currently have.

The 8850 and 9061 forms are available on our website at

http://mn.gov/deed/wotc under the tab “How to Apply”. The website lists all of the target groups covered by the tax credit for individuals hired before January 1, 2015.

The WOTC is currently in a program hiatus; however please continue to submit applications timely throughout the hiatus to ensure applications will not be denied for being late once the program has been reauthorized.

This form change requirement includes applications submitted to the WOTC online application system.

Thank you for your cooperation. If you have any questions, please call 651-259-7507 or 1-888-234-5521.

Karen Marberry | Work Opportunity Tax Credit Coordinator
Department of Employment and Economic Development
1st National Bank Building, 332 Minnesota St., Suite E200, St. Paul MN 55101
Direct: 651-259-7521 l TTY: 651-296-3900 l Fax: 651-297-7722
Web | Twitter | Facebook

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We’re Still Waiting – Tax Extenders Omitted from the Two-Year Budget Deal

I’m sorry, I should have posted this sooner.

The Bipartisan Budget Agreement of 2015 as worked out by Speaker Boehner and other leaders this week does not include WOTC or other tax extenders. The extenders will likely become a priority for the new Speaker in coming days. They most certainly ARE a priority for tens of thousands of businesses and tax payers, all of whom have their eyes on Congress this week.

Tax Extenders Almost Here?

Leaders are closing in on a budget. Word has it that we might get news about tax extenders after tonight’s meeting of House Republicans.  Speaker Boehner is trying to wrap up business before vacating his seat on Thursday.


Congressional leaders and White House closing in on a budget deal

Congress and White House Near Deal on Budget

Congress, White House close to releasing two-year budget agreement


Apprenticeship and Jobs Training Act of 2015 – Tax Credits for Offering Apprenticeships

From The Hill yesterday:

A bipartisan group of senators are introducing legislation to create a $5,000 tax credit for employers that provide apprenticeship programs to train workers in high-demand fields.

Sens. Maria Cantwell (D-Wash.), Susan Collins (R-Maine), Tim Kaine (D-Va.) and Kirsten Gillibrand (D-N.Y.) unveiled the Apprenticeship and Jobs Training Act of 2015 on Wednesday

For the particulars of the Apprenticeship and Jobs Training Act of 2015, see its coverage at Congress.gov.