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The Work Opportunity Tax Credit (WOTC) program’s legislative authority for all WOTC target groups expired on December 31, 2013. On December 19, 2014, the President signed into law P.L. 113-295, the Tax Increase Prevention Act of 2014 (the Act), reauthorizing the WOTC program and the Empowerment Zones (EZs), without changes, from December 31, 2013 through December 31, 2014.
The retroactive extension granted by P.L. 113-295 applies to new hires that began to work for an employer on or after December 31, 2013, and before January 1, 2015. This means that DOES may issue final determinations of filed certification requests for new hires that began to work before January 1, 2015.
For most or all certification requests received during the 2014 hiatus that were processed:
For those certification requests that were received and filed during the 2014 hiatus but were not processed:
UPDATE: On February 19, 2015, the IRS published a notice of transition relief for WOTC, meaning that constituents have additional time to submit their requests for the WOTC. The Relief Period allows constituents to submit WOTC certification requests until April 30, 2015, if they hired a member of a target group between January 1, 2014 and December 31, 2014.
To view IRS Notice 2015-13, click here: http://www.irs.gov/pub/irs-drop/n-15-13.pdf
Denials issued due to untimely filing will be reconsidered. Denials issued due to ineligibility are definitive and will not be reconsidered.
Please be aware, however, that the new Act retroactively reauthorized WOTC to be in effect only through December 31, 2014, and thus, WOTC’s legislative authority has again expired. As a result, the program is currently undergoing an authorization lapse and is in a “hiatus” period.
The U.S. Department of Labor’s Employment and Training Administration (ETA) is currently working jointly with the Internal Revenue Service (IRS) to issue official guidance in the coming weeks.
Per ETA’s Training and Employment Guidance Letter (TEGL) 08-13 regarding the 2014 authorization lapse, direction has been given to follow similar steps regarding the 2015 authorization lapse until further notice. This will allow State Workforce Agencies to continue to accept and process applications for valid target groups that are timely filed for employers' new hires made on or after January 1, 2015. IRS Notice 2015-13 does not apply to 2015 hires. The Act did not change any program requirements or target groups.
Therefore, DOES will continue to accept and mark as timely all certification requests for employers’ new hires made on or after January 1, 2015 that are received during the hiatus and are filed within the 28 days of the applicant's start of employment, until informed otherwise by ETA. We will not, however, issue eligibility certifications for these applications unless the program is reauthorized. We encourage District employers to continue to submit all eligible WOTC applications in a timely manner although Congress has not made a decision on reauthorization of the program or retroactive eligibility certifications.
Please be advised that WOTC applications for Designated Community Residents or Summer Youth Employees living in the District are no longer valid due to expiration on December 31, 2011. However, other state residents within these target groups working for businesses located in the District may qualify.
All active consultant or company representatives with access to our WOTC database may access all approved 2014 determinations that have been in a pending status on Wednesday, January 14, 2015. Access to enter or upload applications for the transition relief period in 2014 and 2015 will be uninterrupted.
Please continue to visit this Web site regularly for updates.
The Work Opportunity Tax Credit (WOTC) is a federally-funded program that reduces the federal tax liability of private-for-profit employers hiring new employees from selected target groups. Individuals in these target groups have consistently had difficulty obtaining employment. Employers hiring qualified applicants may obtain tax relief through the WOTC program. Credit amounts are based upon a percentage of wages paid to, and hours worked by, properly certified employees.
Program Dates: Congressional legislation governs the WOTC that is available to employers on a year-round basis.
The WOTC is governed by Public Law 111-312; Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010. The WOTC undergoes changes and extension(s) and modification to target groups as Congress sees fit. Any target group may be discontinued, modified, or placed on hold for reauthorization. Employers and employer representatives may continue to submit applications for those target groups until a legislative decision is made and a Training Employment and Guidance Letter has been issued by the US Department of Labor Employment and Training Administration with instructions for State Workforce Agencies.
To apply for the Work Opportunity Tax Credit, an employer or employer representative must submit the IRS 8850 and ETA 9061 within 28 days (unless the US Department of Labor applies a period of transition relief) of the new hires’ start date to the state workforce agency, Department of Employment Services to the attention of the WOTC Coordinator. If you are an employer representative, an IRS 2848 or other form of a valid Power of Attorney is required. The application should include documentation to support the verification of the identified target group, if applicable. Submissions may be received electronically through our WOTC database. Email firstname.lastname@example.org to inquire about access to our WOTC database.
Employers hiring qualified applicants in the following target groups may apply for the federal tax relief under the WOTC program:
The Vow to Hire Heroes Act of 2011 (P.L. 112-56) expands and extends the Qualified Veterans groups. The five-year period of discharge is rescinded for this target group to include individuals hired on or after November 22, 2011, and before January 1, 2013. A qualified veteran is a veteran who meets the following criteria:
New Unemployed Categories:
For additional information on the increased tax credits for hiring veterans, see the VOW to Hire Heroes Act Fact Sheet.
Other Target Groups
The legislative authority for the WOTC program's non-veteran groups expired on December 31, 2011 and is currently under Congressional advisement. Given that the non-veteran groups may be reauthorized based on legislative history for WOTC, employers may still submit certification requests for these groups to states. States will accept and may process requests but not issue determinations until WOTC is reauthorized. If extended by Congress, for an employee to be certified as an eligible group member by a State Workforce Agency, the new hire must belong to one of the following target groups:
Note: HUD's urban and USDA's rural designated EZs expired on December 31, 2011. The Summer Youth group is no longer a target group.
Minimum Employment or Retention Period, In addition to belonging to one of the eight groups outlined above, all new adult employees must work a minimum of 120 hours for the employer to qualify to claim the WOTC.
Ineligible Populations, The following individuals or groups of individuals do not qualify for the WOTC, even if they meet the other eligibility criteria:
For more information, email us at email@example.com or call (202) 698-6001.