Employers applying for the Work Opportunity Tax Credit (WOTC) may now find it a little easier to get relief but must act quickly.
The IRS announced an extension to the WOTC deadline for employers to submit documentation for hiring specific groups of employees, including designated community residents or qualified summer youth employees who have primary residences in Empowerment Zones. That deadline is quickly approaching.
Before the extension, employers had 28 days to submit Form 8850 (Pre-Screening Notice and Certification Request for the Work Opportunity Credit) for employees hired between January 1 and October 8.
Under the new guidance, employers can submit the form until November 8, 2021.
Employers who were denied WOTC eligibility when Empowerment Zones ended on December 31, 2020, may also be able to reapply for the credit under the new guidelines.
The WOTC is a federal tax credit available to employers who hire individuals from certain groups facing employment barriers. Eligible employees include qualified Title IV recipients, qualified veterans, qualified ex-felons, qualified designated community residents, qualified vocational rehabilitation referrals, qualified summer youth employees, qualified Supplemental Nutrition Assistance Program (SNAP) recipients, qualified Supplemental Security Income (SSI) recipients, qualified long-term family assistance recipients, and qualified long-term unemployment recipients.
After completing a pre-screening and certification process, employers can receive a credit up to the amount of the Social Security tax or business income liability tax owed.
Under the Consolidated Appropriation Act of 2021, the WOTC was extended until December 31, 2025.
If you think you may be eligible to claim the WOTC or have questions about the extended deadline, please contact a tax professional at Rodefer Moss.
