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Focus on Taxation: Time Sensitive Opportunity - Work Opportunity Tax Credit (WOTC) Extension for 2014

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The IRS recently issued guidance and transition relief with Notice 2015-13 for those employers claiming the WOTC through December 31, 2014.  The WOTC is a Federal credit for employers that hire individuals from specific targeted groups.
February 24, 2015

The IRS recently issued guidance and transition relief with Notice 2015-13 for employers claiming the WOTC through December 31, 2014.  The WOTC is a Federal credit for employers that hire individuals from specific targeted groups. Among the most common targeted groups are Veterans, Designated Community Residents and TANF/SNAP/SSI recipients.  Credits range from $1,200 - $9,600 per employee with the average credit $1,200 - $3,000 per employee.

This notice lifts the 28 day requirement for submitting IRS Form 8850 for employees hired during 2014.  The deadline for submitting applications has been extended until April 30, 2015.  Prior to this notice, employers were required to submit IRS Form 8850 to the appropriate state workforce agency no later than 28 days from the employee’s first day of work.

Although the application deadline has been extended, the employer must still receive a certification before claiming the credit.

This is great news for all employers, whether you’re currently taking advantage of the program or considering participation in the program.  It’s a second chance to screen all employees hired on or after January 1, 2014 and before January 1, 2015 for potential credits.

If you have questions or would like additional information, please contact a member of the State and Local Tax Services Group.

Click here to view the IRS Notice 2015-13.

 

Any federal tax advice contained in this communication (including any attachments): (i) is intended for your use only; (ii) is based on the accuracy and completeness of the facts you have provided us; and (iii) may not be relied upon to avoid penalties.

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