Paul Suplizio, President of the the Work Opportunity Tax Credit Coalition has authored an official letter to the Department of Treasury urging the Department to extend the time period granted for WOTC applications under Transition Relief.
IRS Notice 2016-22 provides Transition Relief for employers needing more time to process WOTC applications for employees hired in 2015 and early 2016. This relief was necessary because of Congress’ long delay in reauthorizing the WOTC program after it expired on December 31, 2014.
Congress passed legislation on December 18, 2015 to reauthorize WOTC for 5 years, including retroactively 1 year to cover 2015.
Under the regular rules, employers face a 28-day deadline to submit a WOTC application for an employee who qualified at their time of hire. Transition Relief, as currently offered by the IRS, extends the application deadline to June 29, 2016 for all eligible employees hired from January 1, 2015 through May 31, 2016. The WOTC Coalition is asking the Treasury Department to extend the June 29 deadline by another 90 days.
Why? WOTC employers still face a major problem. The Department of Labor has not yet issued the revised application forms and the official guidance employers need in order to comply with the newest provision of the WOTC tax code.
State workforce agencies that receive the applications and issue certificates for qualifying employers also face challenges. Until the new forms and guidance are issued, they can not update the software systems and online webforms that support the application and certification process. Agencies in many states are asking employers to delay submitting their applications until the updates and revisions can be made.
Even if the Department of Labor issued the anticipated forms and guidance today, many state workforce agencies would be hard pressed to complete their internal system updates in time for employers to submit all their WOTC applications before the June 29 deadline.