Perspectives

IRS provides additional time to file Form 8850 to claim WOTC

Multistate tax alert | February 20, 2015

On February 19, 2015, the Internal Revenue Service (“IRS”) issued Notice 2015-13, providing guidance to employers claiming the Work Opportunity Tax Credit (“WOTC”) under Internal Revenue Code (“IRC”) §§51 and 3111(e). For certain employers seeking to qualify for the WOTC, the Notice provides additional time beyond the 28-day deadline specified in IRC §51(d)(13)(A) to submit Form 8850 ('Pre-screening Notice and Certification Request for the Work Opportunity Credit') to an applicable Designated Local Agency (“DLA”). This Tax Alert summarizes this IRS guidance.

Notice 2015-13

The Tax Increase Prevention Act of 2014 (“TIPA”)2 retroactively extended the WOTC expiration date from December 31, 2013, to December 31, 2014, as applied to businesses that hire employees who fall within certain targeted groups.3

Tax Increase Prevention Act of 2014 

In Notice 2015-13 the IRS acknowledges that the TIPA’s retroactive extension of the WOTC may cause employers to “need additional time to comply with the requirements of IRC §51(d)(13)(A)[,]” namely, the filing of Form 8850 with a DLA.4 To address this concern, Notice 2015-13 provides transitional relief applicable to the timing for filing Form 8850 by employers that hire a member of a targeted group on or after January 1, 2014, and before January 1, 2015. As specified in the Notice, employers will be considered to have satisfied the requirements of §51(d)(13)(A)(ii) if they submit the completed Form 8850 to the applicable DLA to request certification not later than April 30, 2015.

1 The WOTC is a federal income tax credit of up to $9.600 for each qualified newly hired employee, depending upon qualification category. See, IRC §51(a), (b).

2 Pub. L. No 113-295 (enacted Dec. 19, 2014).

3 The members of the targeted groups that qualify under the WOTC are defined in IRC §51(d)(2) through (10).

4 Notice 2015-13.

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The Multistate Tax Alert Archive includes external tax alerts issued by Deloitte Tax LLP's Multistate Tax practice during the last three years. These external alerts highlight selected developments involving state tax legislative, judicial, and administrative matters. The alerts provide a brief summary of specific multistate developments relevant to taxpayers, tax professionals, and other interested persons.

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