By Julie Welch and Luke Guettermann
The Work Opportunity Tax Credit (WOTC) is a Federal tax credit available to employers who hire and retain veterans and individuals from other target groups with significant barriers to employment or reside in certain empowerment zones or rural renewal counties. As part of the “Tax Extenders” legislation that was enacted on December 18, 2015, the WOTC was extended retroactively for 2015.
In IRS Notice 2016-22, the IRS provides transitional relief related to the retroactive renewal of the WOTC. The notice waives the general 28-day deadline for submitting IRS Form 8850 (WOTC Pre-Screen notice) for qualifying individuals hired in 2016. The extended deadline is May 31, 2016.
Key points:
Employers have until May 31, 2016 to submit the WOTC applications for employees hired since January 1, 2015
If an employer has been submitting the forms throughout 2015 but missed sending some in within the general 28-day period, those employers can submit those applications for the WOTC up through May 31, 2016.
Beginning in 2016, “Long-term Unemployed Recipients” qualify for the WOTC.
As of June 1, 2016, the requirement to submit within 28 days goes back into effect.
For more information, see https://www.irs.gov/pub/irs-drop/n-16-22.pdf