The deadline to claim the Work Opportunity Tax Credit (WOTC) for employees hired on or after January 1, 2015 and on or before May 31, 2016 is June 29, 2016. WOTC is a federal tax credit that can be as much as $9,600 per qualified employee. WOTC applications are typically due within 28 days of an employee’s start date, but IRS Notice 2016-12 permits taxpayers an opportunity to retroactively voucher employees. In addition, the Protecting Americans from Tax Hikes (PATH) Act of 2015 introduced the long-term unemployed category that should increase the number of employees eligible for WOTC. Employees who were unemployed 27 consecutive weeks and received federal or state unemployment compensation prior to being hired are eligible under this new category. The IRS recently published a revised Form 8850 and the Department of Labor (DOL) has released ETA 9175 to claim the long-term unemployment recipients. A revised Form 9061 has not yet been issued. This category is only available to employees hired on or after January 1, 2016. It is possible that additional time may be granted as the IRS has been very slow to implement changes to the WOTC program. Congressmen Tom Reed (R-NY) and Bill Pascrell (D-NJ) sent a letter to the IRS, DOL, and Treasury requesting additional transitional relief. In the interim, taxpayers should act quickly to assess this opportunity. Please do not hesitate to contact us if you have any questions or need assistance with the application process.
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