The IRS just released Notice 2016-22, which provides guidance for the Work Opportunity Tax Credit (WOTC) and transitional relief.
As WOTC was on hiatus during 2015, the notice specifies that for those hired between January 1, 2015 and May 31, 2016, the IRS Form 8850 will be considered timely filed if it is submitted no later than June 29, 2016. If a business has any new hires within this date range that may qualify, employers may now take advantage of these lucrative credits.
The IRS also provided guidance on the new Long Term Unemployed category, which was just added to WOTC as of January 1, 2016. Soon, new forms will be released that will cover this new target group defined as an individual who on the day before the individual begins work for the employer, or, if earlier, the day the individual completes the IRS Form 8850, is in a period of unemployment that is not less than 27 consecutive weeks, and includes a period (which may be less than 27 weeks) in which the individual received unemployment compensation under state or federal law.
There is also transitional relief for this new target group. For those hired between January 1, 2016 and May 31, 2016, the IRS Form 8850 will be considered timely filed if it is submitted no later than June 29, 2016. Although the updated forms for the new Long Term Unemployed category are not out yet, businesses may attempt to identify new Long Term Unemployed hires in the date range above and complete forms when those are released.
For more information about transitional relief for WOTC or about WOTC itself, please contact Stacey May, director of tax credits, at 888-556-0123 or email@example.com