With WOTC, Timing is Everything!
Famed English actor Jeremy Irons said, “The secret to life is timing.” So too is success with the Work Opportunity Tax Credit!
Also known as “WOTC” (pronounced Watt See), the Work Opportunity Tax Credit rewards businesses with $2,400 to $9,600 in federal income tax credit when they hire members of a WOTC target group.
Hello friends and readers, this is Vaughn Hromiko, here. This post is meant as a question to employers and agents . . . and anyone involved with the Work Opportunity Tax Credit program. I would love to hear from you.
The Question: How do you (or your CPA, or your company, or others you have observed), handle the claiming of Work Opportunity Tax Credits for employees whose WOTC certifications are delayed until after the tax-return filing deadline?
The IRS has issued a revision of IRS Form 8850 “Pre-Screening Notice and Certification Request for the Work Opportunity Credit.” This revision was made necessary by the recent Protecting Americans from Tax Hikes Act of 2015 (PATH Act), which added a new target group to the WOTC program. The form now includes a question to screen for Long Term Unemployment Recipients.
Question number 7 at the bottom reads: (more…)
It is time to think about updating your Work Opportunity Tax Credit (WOTC) pre-screening documents.
The IRS’ latest revision to Form IRS 8850, “Pre-Screening Notice and Certification Request for the Work Opportunity Credit” is dated March 2015. I do not notice any material changes to the form. (more…)
Opportunity Alert! IRS Notice 2015-13 Providing Transition Relief for Employers Submitting Late WOTC Applications
We have been waiting for this!
The IRS has released IRS Notice 2015-13, which provides transition relief given the late retroactive renewal of the Work Opportunity Tax Credit program in December 2014.
Notice 2015-13 waves the 28-day deadline for submitting IRS Form 8850 (the WOTC Pre-screen Notice) for qualifying employees hired in 2014. The extended deadline for submitting the applications for affected employees is now April 30, 2015. From the Notice: (more…)
Catching up with the VOW to Hire Heroes Act, which was signed by President Obama in November of last year, the Internal Revenue Service has issued an updated Form 8850 and some very important guidance.
Disconnected Youth: Although not unexpected, I should note that in preparing the updated IRS 8850 Pre-screening Notice, the IRS has removed the questions related to qualifying Disconnected Youth. This category expired on December 31, 2010.
We’ve been clinging to the hope that it would be added-back with the extension of WOTC. I personally have not given up on that hope. Also, if I am not mistaken, the Department of Labor’s current instructions to State Workforce Agencies still requires them to reserve disconnected youth applications on file pending future instructions.
Notice 2012-13: Notice 2012-13 provides guidance on a number of important issues and should not be overlooked. I suggest a thorough reading. Major topics covered include:
- Background of the new veterans categories
- Transition relief (a grace period extending the 28-day submission deadline for IRS 8850 for qualified veterans hired between November 22, 2011 and May 22, 2012)
- The use of electronic signatures for IRS 8850
- Signing or filing IRS 8850 by FAX transmission
- Guidance for tax-exempt organizations claiming WOTC
Request for Comments: In addition to the guidance provided by the IRS on these topics, the IRS is also requesting comments about (1) alternative methods for certification of qualified veterans and (2)alternative methods of filing Form 8850.
In summary, with this notice the IRS has given us a lot to think about and a lot of work to do.
I have wanted to write about this for a couple of weeks now, but as you know if you follow the news, there has been a lot going on.
On March 5, 2010 the U.S. Department of Labor’s Employment and Training Administration issued Training and Employment Guidance Letter NO. 3-09 Change 2. (I’m not complaining, but even the names of these documents are complicated.) (more…)