IRS Gives Employers Work Opportunity Tax Credit Extension
In December 2015, President Obama signed the Protecting Americans from Tax Hikes Act of 2015 extending the Work Opportunity Tax Credit through 2019.
WOTC is a federal tax credit available to employers who hire and retain veterans and individuals from other target groups with significant barriers to employment.
Employers claim about $1 billion in tax credits each year under the WOTC program.
There is no limit on the number of individuals an employer can hire to qualify to claim the tax credit, and there are a few simple steps to follow to apply for WOTC.
Because the PATH Act extended the WOTC retroactively for 2015 for members of targeted groups, and created a new group (qualified long-term unemployment recipients), employers need additional time beyond the statutory 28 days to file their WOTC applications.
There is no limit on the number of individuals an employer can hire to qualify to claim the tax credit.
Under the extension, employers who hired employees between January 1, 2015 and May 31, 2016, will be considered to have filed Form 8850 on time for the employee, if it is filed no later than June 29, 2016.
For more information, see IRS Notice 2016-22.
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