Deadline extended to April 30 for WOTC employers to submit Form 8850
Extends 28-day certification window for retroactive 2014 WOTC claims
TAX ALERT |
The IRS recently issued Notice 2015-13 to provide transition relief to employers claiming the section 51 Work Opportunity Tax Credit (WOTC). Many of the provisions of the WOTC were retroactively extended by the Tax Increase Prevention Act of 2014 for one year through Dec. 31, 2014. The WOTC allows employers a credit for a portion of wages paid to certain new employees who are qualified veterans or members of disadvantaged groups.
Before an employer can claim the credit, it must obtain certification that an individual is a member of a targeted group. To obtain this certification, an employer must (1) complete a pre-screening notice for each individual on or before the day the individual is offered employment and (2) submit Form 8850 “Pre-Screening Notice and Certification Request for the Work Opportunity Credit” to a State employment security agency known as a Designated Local Agency (DLA)no later than the 28th day after the individual begins work. Since the WOTC was retroactively extended to apply to 2014, employers needed relief from this 28-day submission requirement in order to claim any credits retroactively available.
The notice provides that employers now have until April 30, 2015, to submit Form 8850 to DLAs for members of the following targeted groups, hired between Jan. 1, 2014, and Dec. 31, 2014:
- Qualified IV-A recipients
- Qualified veterans
- Qualified ex-felons
- Designated community residents
- Vocational rehabilitation referrals
- Qualified summer youth employees
- Qualified supplemental nutrition assistance program benefits recipients
- Qualified SSI recipients
- Long-term family assistance recipients
The April 30, 2015, deadline also applies to an employer that hires any qualified veteran between Jan. 1, 2014, and Dec. 31, 2014. The term “qualified veteran” means any veteran who is certified by the DLA as:
- Being a member of a family receiving assistance under a supplemental nutrition assistance program under the Food and Nutrition Act of 2008 for at least a three-month period ending during the 12-month period ending on the hiring date,
- Entitled to compensation for a service-connected disability, and
- Having a hire date which is not more than one year after having been discharged or released from active duty in the Armed Forces of the United States, or
- Having aggregate periods of unemployment during the one-year period ending on the hiring date which equal or exceed six months
- Having aggregate periods of unemployment during the one-year period ending on the hiring date which equal or exceed four weeks (but less than six months), or
- Having aggregate periods of unemployment during the one-year period ending on the hiring date which equal or exceed six months.
This provides an opportunity for companies to review their hirings for 2014 and retroactively obtain certifications for qualified verteran employees and employees from other targeted groups in order to claim the WOTC on their 2014 tax return.