Bulletin: Work Opportunity Tax Credit Expands
Work opportunity tax credit expanded
The Work Opportunity Tax Credit (WOTC) allows employers who hire employees who meet a defined set of qualifications to get a credit against income tax of a percentage of wages paid to the qualified employees. The credit amount and duration varies by the set of qualifications.
The Protecting Americans from Tax Hikes Act extended the Work Opportunity Tax Credit for five years so that it applies to eligible new hires that begin work for the employer on or before Dec. 31, 2019. Additionally, effective for individuals who begin work for an employer after Dec. 31, 2015, employers can also claim an income tax credit for new workers who are members of a newly designated targeted group—qualified long-term unemployed individuals. To qualify for this new group, the newly hired employee must have been unemployed for a period of 27 consecutive weeks and also received some type of state or federal benefit.
Long Term Unemployed Eligible Applicants
In anticipation of this new category, Equifax Workforce Solutions began work to start screening for eligibility in mid-2015. As a result, our systems are already screening and determining eligibility for this new opportunity, and we began forwarding out certification requests (Form 8850) to State Workforce Agencies last week. Our clients are able to take advantage of this category for all new hires in 2016.
Transitional Relief (Retro WOTC Period)
We also anticipate that the Department of Labor will release guidance in the near future for a Transitional Relief period. In the past, when WOTC has gone into legislative hiatus, the Department of Labor has issued guidance allowing employers to screen and submit requests for certification for employees that may not have been screened while the program was out of legislative authority. Equifax Workforce Solutions stands ready to allow retro screenings as soon as the Department of Labor issues guidance. Our systems are ready for existing clients to screen eligible employees and we are streamlining our sales and implementation processes so we can quickly board and start screening for new clients.
This is a unique opportunity for employers to take advantage of the Work Opportunity Tax Credit for employees who might have either missed screening in 2015, and for employers who were not taking advantage of the program.
Please contact us to learn more about the WOTC program.
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