Bulletin: WOTC Transition Relief Period Extended
Following a hiatus in 2015, the Work Opportunity Tax Credit (WOTC) program was extended retroactively for hires from January 1, 2015 through December 31, 2019. Earlier this year, the IRS issued Notice 2016-22 providing for “transition relief” for employers to file WOTC form 8850 for any hires from January 1, 2015 through May 31, 2016. The IRS also added a new target group for qualified long-term unemployment recipients. For employees qualifying for that category, the transitional relief period was for hires from January 1, 2016 through May 31, 2016. This allowed employers to forgo the normal 28-day filing deadline for WOTC so long as the application was made by June 29, 2016.
The Department of Labor and the Office of Management and Budget have been working to finalize a new Self Attestation Form as supplementary documentation for the new long-term unemployed target group. In addition, some State Workforce Agencies have been waiting to receive instructions from the Department of Labor for processing the applications and certifications for hires during the transition relief period, including those in the new target group.
On June 17, 2016 the Department of Labor issued a new TEGL (Training and Employment Guidance Letter) which provides direction to State Workforce Agencies. This enables employers to begin sending applications for hires from the transition relief period to states that had not been accepting them up to this point.
TEGL 25-15 also extends the transition relief period an additional three months to include all hires from January 1, 2015 to August 31, 2016 and for the new qualified long-term unemployed recipient target group from January 1, 2016 to August 31, 2016. With the extension, the IRS will continue to forgo the normal 28-day filing deadline for submitting the form 8850 to allow employers to capture any missed tax credits for qualifying new hires made during the transition relief period. Employers may retroactively screen applicants hired during the applicable time period so long as the application is made by September 28, 2016.
Equifax offers eSignature on both our phone-in screening system and online screening application. Any individuals who are identified as possibly credit-eligible can now electronically sign a fully compliant tax credit screening without the need for paper forms to be processed or managed, which may lead to a more efficient and valuable process.
Contact us to learn more about how you can take advantage of this opportunity.
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