IRS Extends WOTC Application Deadline Until April 30 (article)

IRS Extends WOTC Application Deadline Until April 30 (article)

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Prior to the passage of the Tax Increase Prevention Act of 2014 (Extenders Act), the Work Opportunity Tax Credit ("WOTC") had expired as of December 31, 2013 for all targeted groups. The Extenders Act retroactively extended the WOTC for all targeted groups through December 31, 2014. Form 8850, which certifies an employee's status as a member of a targeted group, generally must be submitted within 28 days of when the employee begins employment. In Notice 2015-13, the IRS provides relief from the late passage of the Extenders Act by lengthening the period of time by which Form 8850 must be filed.

The Work Opportunity Tax Credit is a federal program that provides tax savings to employers who hire people from certain target groups, including public assistance recipients, veterans, youth and those with previous felony convictions. The purpose of this program is to enable these individuals to gradually move from economic hardship to steady employment, while participating employers are rewarded by being able to lower their federal income tax liability. Targeted groups include:

  • qualified individuals in families receiving certain government benefits, including Title IV-A social security benefits (aid for dependent children) or food stamps;
  • qualified individuals who receive supplemental Social Security income or long-term family assistance;
  • veterans who are members of families receiving food stamps, who have service-connected disabilities, or who are unemployed;
  • designated community residents;
  • vocational rehabilitation referrals certified to have physical or mental disabilities;
  • qualified summer youth employees who live in empowerment zones, enterprise communities, or renewal communities; and
  • ex-felons hired no more than one year after the later of their conviction or release from prison.

The WOTC is generally 40 percent of up to $6,000 of a qualified worker's qualified first-year wages for a maximum credit of $2,400 per qualified employee. For qualified veterans, the maximum credit is 40% of qualified wages ranging from $6,000 to $24,000 depending on their classification (for a maximum credit ranging from $2,400 to $9,600).

For employees in targeted groups, the employer has until April 30, 2015 to file Form 8850 for any employees hired during calendar year 2014.

This retroactive extension of the deadline to submit Form 8850 provides an opportunity to apply for the WOTC beyond the traditional 28-day window. If during 2014 you hired employees who are members of any of the targeted groups above, contact your local CBIZ MHM tax professional to determine whether you can qualify for the Work Opportunity Tax Credit.


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IRS Extends WOTC Application Deadline Until April 30 (article)For employees in targeted groups, the employer has until April 30, 2015 to file Form 8850 for any employees hired during calendar year 2014. ...2015-02-23T12:56:00-05:00

For employees in targeted groups, the employer has until April 30, 2015 to file Form 8850 for any employees hired during calendar year 2014.