IRS Notice 2016-22

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IRS Notice 2016-40 – Extends WOTC Transition Relief 3 Additional Months

Friday, June 17th, 2016

Today, the IRS formally recognized that employers (and state workforce agencies) need more time to adjust to the WOTC-program changes initiated by the Protecting Americans from Tax Hikes Act of 2015.

This morning, the IRS issued Notice 2016-40, which extends transition relief for another three months. At about the same time, the Department of Labor also issued Training and Employment Guidance Letter Number 25-15, dealing with the same issues.

Background:

Back in March, the IRS issued Notice 2016-22, which temporarily modified the normal 28-day application deadline for WOTC applications.  That notice established June 29th as the grand-deadline to submit applications for all employees hired from January 1, 2015 through May 31, 2016.

Built into that schedule, however, was anticipation that the Department of Labor would issue updated WOTC forms in a timely manner.  Employers and state workforce agencies would need time to adjust their procedures and technology to handle all the changes.

This morning, however, we found ourselves just 12 days away from that original deadline, still waiting for the updated forms.  Happily, the new ETA forms are referenced in this mornings Guidance Letter. So I anticipate having them soon — probably later today.

Nevertheless, 12 days is not enough time to make this work.  We now collectively have been granted until September 28th to get our systems into working order and to submit all outstanding applications.

This deadline extension applies to employees hired January 1, 2015 through August 31, 2016.  Other than extending the time frames of transition relief, the recent notice does not otherwise modify the terms of the original IRS Notice 2016-22.

 

 

IRS Notice 2016-22 – WOTC Transition Relief and Guidance

Tuesday, March 8th, 2016

IRS Notice 2016-22 can now be found on the IRS website through a Google search.  Click the link to get your copy.

In a nut shell, for employees hired from January 1, 2015 through May 31, 2016 (inclusive), the usual 28-day application deadline has been extended through June 29, 2016.  That’s good.

Disappointedly, however, Notice 2016-22 does not provide definitive guidance about qualifying employees under the new Long Term Unemployment Recipient target group.  Rather, it defers this to the yet-to-be revised Form 8850 and ETA 9061.

“Those modified forms and instructions will indicate the information that must be provided on the forms for the employer to receive certification from the DLA that the individual is a qualified long-term unemployment recipient.”

“The Treasury Department and the IRS anticipate that the modified forms will include a requirement that the individual signing the form attest that he or she meets the requirements to be a qualified long-term unemployment recipient and a requirement that the individual attest to the period(s) during which the individual was unemployed and the period the individual received unemployment compensation.”

A few years ago, the IRS developed similar requirements for the Disconnected Youth target group (now discontinued).  To document an employee’s status as a disconnected youth, the employee signed a statement form provided by the Department of Labor.  I’m guessing there will be something similar promulgated for the Long Term Unemployment Recipient group.

WOTC Transition Relief and Forms Update – Almost There

Tuesday, March 8th, 2016

Paul Suplizio, President of the Work Opportunity Tax Credit Coalition, announced this morning that the IRS has released Notice 2016-22 providing for WOTC Transition Relief. I believe Paul but so far, I am unable to find the documents online.  Perhaps they’ll show up later today.

As soon as the nitty-gritty details come to light, you’ll be the first to know.