Employers Have Until September 28 to Request Certification for Eligible New Hires

The IRS is urging employers to take advantage of a special September 28, 2016 certification deadline regarding the Work Opportunity Tax Credit (WOTC).

Background
The WOTC is a federal tax credit available to employers for hiring individuals from certain target groups who have consistently faced significant barriers to employment.

Previous legislation retroactively extended the WOTC to apply to individuals who belong to target groups and begin work for their employers from January 1, 2015 through December 31, 2019. The law also added Previous legislation to the list of target groups (qualified long-term unemployment recipients must begin work after December 31, 2015 in order for the employer to claim the credit).

Before an employer may claim the WOTC, it must obtain certification that an individual is a member of a target group. To obtain certification, employers must file IRS Form 8850, Pre-Screening Notice and Certification Request for the Work Opportunity Credit. Normally, an eligible employer must file Form 8850 with its respective state workforce agency within 28 days after the eligible worker begins work.

Special Certification Deadline
Due to the late enactment of the legislation extending the WOTC (and its retroactive impact), the IRS is giving employers extra time--until September 28, 2016--to make certification requests related to eligible workers hired any time in 2015 and during the first eight months of 2016. Thus, the special September certification deadline applies to eligible workers hired between January 1, 2015 (January 1, 2016 for qualified long-term unemployment recipients) and August 31, 2016.

The regular 28-day rule will again apply for any eligible worker hired after August 31, 2016. Other requirements and further details can be found in the instructions to Form 8850, IRS Notice 2016-22, and IRS Notice 2016-40.

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