Employers Have Additional Time to Claim Work Opportunity Tax Credit

On Friday, the IRS announced that it was extending the time employers who want to claim the work opportunity tax credit (WOTC) have to file Form 8850, Pre-Screening Notice and Certification Request for the Work Opportunity Credit (Notice 2013-14).

Form 8850 is usually due no later than 28 days after an employee begins work. The retroactive extension of the credit had raised questions about how employers who hired eligible employees in 2012 and early 2013 would be able to timely file the form and certify those employees. This notice answers those questions.

Under the extension, employers who hire a member of a targeted group on or after Jan. 1, 2012, and up to March 31, 2013, will be considered to have timely filed Form 8850 if it is filed with the designated local agency (a state employment security agency established under 29 U.S.C. §§49–49n) by April 29, 2013.

Before the American Taxpayer Relief Act of 2012 (ATRA), P.L. 112-240, was enacted, the WOTC credit had expired on Dec. 31, 2011, for all but certain qualifying veterans. ATRA retroactively extended the WOTC for certain employees (members of certain targeted groups as defined in Sec. 51(d)) who begin work for an employer through Dec. 31, 2013. It also extended the provisions of the VOW to Hire Heroes Act of 2011, P.L 112-56, which made the WOTC credit available as a credit against the employer’s Social Security tax for tax-exempt organizations that hire qualified veterans.