Great news! The IRS has provided a new grace period extending the deadline for WOTC applications of employees who live in a federal empowerment zone. Two WOTC target groups are affected.
- Designated Community Residents (Group D)
- Summer Youth Employees (Group F)
This grace period (also called “transition relief”) applies only to empowerment-zone employees hired from January 1, 2021, through October 8, 2021. The normal deadline expires 28 days after a new hire’s start date. Under the notice, however, affected applications can be submitted through November 8, 2021.
It’s vital to notice that not all Designated Community Resident employees are affected. Again, this only applies to employees who live in an empowerment zone. Footnote 2 on page 1 of the Notice states:
“For purposes of this notice, the term “Designated Community Resident” and “Qualified Summer Youth Employee” refer to those individuals certified by the DLA as having a principal place of residence within an Empowerment Zone.”
Apparently, this means that Designated Community Residents who live within a Rural Renewal County are not affected by the grace period. Applications for those employees would remain subject to the regular 28-day application deadline.
IRS Notice 2021-43 lays out the details, which you can read here: https://www.irs.gov/pub/irs-drop/n-21-43.pdf
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