IRS Extends Form Deadline for Work Opportunity Tax Credit – March 17, 2015 by Dave Sobochan

Three Steps to Identify and Certify Qualifying Employees

The IRS recently issued Notice 2015-13, which gives taxpayers until April 30, 2015, to submit Form 8850 (“Pre-screening Notice and Certification Request”) to qualify for the Work Opportunity Tax Credit (WOTC).

This extension is important to employers who hired individuals in 2014 but could not take advantage of the WOTC because the credit had expired. Since the credit was not extended until the end of December (as part of the Tax Increase Prevention Act of 2014), many employers had already passed the 28-day-window to submit Form 8850 and qualify the new hire for the credit.

What this means is that if you hired individuals in 2014 who are from a targeted group (defined below), then you could still qualify for a tax credit of between $2,400 to $9,600 per employee. Below are the steps you should take to identify and certify individuals who may be eligible for the credit:

Step 1: Determine if you have a qualifying employee. Below are definitions, according to the Ohio Department of Job and Family Services (ODJFS), of who is a qualifying employee for the purposes of this credit.

Veterans
A new hire qualifies for the veterans target group if the individual is ONE of the following:

  • A veteran who is a member of a family that received SNAP benefits (food stamps) for at least a three-month period during the 15-month period ending on the hiring date.
  • A disabled veteran entitled to compensation for a service-connected disability who has been:
    • Hired within one year of discharge or release from active duty, OR
    • Unemployed for at least 6 months in the year ending on the hiring date
  • A veteran who has been unemployed for:
    • At least four weeks in the year ending on the hiring date, OR
    • At least six months in the year ending on the hiring date

Note that to have a veteran’s status be eligible for WOTC, an individual must also meet BOTH of the following:

  • Have served on active duty (not including training) in the U.S. Armed Forces for more than 180 days, OR have been discharged or released from active duty for a service-connected disability.
  • Not have a period of active duty (not including training) of more than 90 days that ended during the 60-day period ending on the hiring date.

Long-Term Temporary Assistance for Needy Families (TANF) Recipient
To qualify for this target group, a new hire must be a member of a family that meets ONE of the following circumstances:

  • Has received TANF benefits for at least 18 consecutive months ending on the hiring date.
  • Has received TANF benefits for at least 18 consecutive or non-consecutive months after August 5, 1997, AND has a hiring date that is not more than two years after the end of the earliest 18-month period after August 5, 1997.
  • Has stopped being eligible for TANF payments during the past two years, because a federal or state law limited the maximum time those payments could be made.

Short-Term TANF Recipient
A new hire qualifies for this target group if the individual is a member of a family that received TANF benefits for any nine-month period during the 18-month period ending on the hiring date.

Supplemental Nutrition Assistance Program (Food Stamp) Recipient
A new hire qualifies for this target group if the individual is an 18-39 year-old member of a family that received Supplemental Nutrition Assistance Program (SNAP) benefits for ONE of the following:

  • The six months ending on the hiring date.
  • At least three of the five months ending on the hiring date.

Designated Community Resident (DCR)
A new hire meets the criteria for this target group if the individual is an 18-39 year-old who resides within ONE of the federally designated areas:

  • Rural Renewal Counties (RRCs).
  • Empowerment Zones (EZs).

Vocational Rehabilitation (VR) Referred Individual
A new hire is a member of this target group if the individual with a disability has completed, or is completing, rehabilitative services provided by ONE of the following:

  • A state-certified agency.
  • An Employment Network under the Ticket to Work program.
  • The U.S. Department of Veteran Affairs.

Ex-Felon
A new hire meets the criteria for this target group if the individual meets BOTH of the following:

  • Has been convicted of a felony.
  • Has a hiring date that is not more than one year after the conviction or release from prison.

Supplemental Security Income (SSI) Recipient
A new hire meets the criteria for this target group if the individual is a recipient of SSI benefits for any month that ends during the 60-day period ending on the hire date.

Summer Youth Employee
A new hire is a member of this target group if the individual is a 16 or 17 year old youth who meets BOTH of the following:

  • Works for the employer between May 1 and September 15.
  • Resides in an Empowerment Zone (EZ).

Step 2: Fill Out Forms 8850 and 9061. There are a few things to note about completing these forms:

Form 8850

  • The employee must execute page one.
  • The employer executes page two.
  • In the signature line of the employee portion, there is a statement that says the employer provided this form to the employee before the day the job was offered. Due to this year’s extension, this is deemed to have happened if the employee is given the form before April 30, 2015.

Form 9061

  • Documentary evidence is required when submitting this form. Page three of the form provides a list of the types of documentary evidence required for specific questions.


Step 3: Submit the Forms TOGETHER. Forms 8850 and 9061 are required to be submitted together with documentary evidence. Submit the forms using one of these two methods:

  • Online at https://wotc.jfs.ohio.gov/UserLogin.aspx?ReturnUrl=%2f
  • Email a PDF version of the form to WOTC_CONTACT@jfs.ohio.gov

The WOTC is meant to encourage the hiring of individuals from the groups listed above; but, remember, you must receive certification before taking the WOTC on your 2014 tax returns —which could mean filing for an extensionif you have not received confirmation from the ODJFS.

Contact Dave Sobochan or a member of your service team immediately if you feel your business may qualify for the WOTC.

This communication is published by Cohen & Company for our clients and professional associates. Cohen & Company is not rendering legal, accounting or other professional advice. Any action taken based on information in this publication should be taken only after a detailed review of the specific facts and circumstances.