The Internal Revenue Service is giving employers extra time beyond the 28-day deadline for submitting a form to claim the Work Opportunity Tax Credit after the WOTC was extended late last year by Congress.
Notice 2015-13 provides guidance on Section 119 of the Tax Increase Prevention Act of 2014, which was enacted Dec. 19, 2014, and extended a host of tax breaks through the end of last year. Among other provisions, the Act amends Section 51 of the Tax Code to extend the WOTC through Dec. 31, 2014.
The notice, which the IRS issued last Thursday, provides employers additional time beyond the 28-day deadline in Section 51(d)(13) for submitting Form 8850, Pre-screening Notice and Certification Request for the Work Opportunity Credit, to designated local agencies, such as a state employment security agency.
The WOTC is available to employers that hire individuals who are members of certain targeted groups, such as veterans. Before an employer can claim the WOTC, the employer must obtain certification that the hired individual is a targeted group member. They can obtain certification of an individual's targeted group status from a designated local agency, or DLA. An employer is supposed to submit Form 8850 to the DLA no later than the 28th day after the individual begins work for the employer.
Section 51(d)(13)(A) provides that an individual is not treated as a member of a targeted group unless (1) on or before the day the individual begins work, the employer obtains certification from the DLA that the individual is a member of a targeted group; or (2) the employer completes a pre-screening notice (Form 8850) on or before the day the individual is offered employment and submits the notice to the DLA to request certification no later than 28 days after the individual begins work. Because the tax extenders legislation extended the WOTC retroactively for 2014 for members of targeted groups, the IRS noted that employers need additional time to comply with the requirements.
Accordingly, a taxable employer that hired a member of a targeted group, or a qualified tax-exempt organization that hired a qualified veteran, on or after Jan. 1, 2014, and before Jan. 1, 2015, will be considered to have satisfied the requirements if it submits a completed Form 8850 to the appropriate DLA to request certification no later than April 30, 2015.
A timely request for certification does not eliminate the need for the employer to receive a certification before claiming the credit, the IRS noted.
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