IRS reminds employers of WOTC changes, requirements

The IRS has reminded employers that year-end 2015 tax legislation modified the Work Opportunity Tax Credit, (WOTC). Additionally, a special certification deadline of September 28, 2016, is approaching.
The Protecting Americans from Tax Hikes Act (PATH Act) (P.L. 114-113), renewed the WOTC for nine categories of workers. The legislation also added a tenth category for long-term unemployment recipients, hired on or after January 1, 2016, who had been unemployed for a period of at least 27 weeks, and received state or federal unemployment benefits during part or all of that time.

Employers must timely request certification by filing Form 8850, Pre-Screening Notice and Certification Request for the Work Opportunity Credit, with a state workforce agency. The IRS explained that due to the late enactment of the PATH Act, employers have extra time, until September 28, 2016, to make requests related to eligible workers hired any time in 2015, and during the first eight months of 2016 (Notice 2016-40; see Payroll Management Guide Report Letter 1471, June 28, 2016). The regular 28-day rule for certification applies for any eligible worker hired after August 31, 2016, the IRS added. (IR-2016-122, September 20, 2016.)

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