Work Opportunity Tax Credit

Work Opportunity Tax Credit

A valuable tax credit is available to certified businesses that hire long-term unemployment recipients and other groups facing significant barriers to employment. The Work Opportunity Tax Credit, which has been extended through 2025, encourages employers to hire members of 10 targeted groups.

Of significant note due to the COVID-19 pandemic, one of these groups is those that have been unemployed for at least 27 consecutive weeks and received unemployment benefits during part or all of that time. The other groups are: Temporary Assistance for Needy Families (TANF) recipients; unemployed (including disabled) veterans; formerly incarcerated individuals; designated community residents living in Empowerment Zones or Rural Renewal Counties; vocational rehabilitation referrals; summer youth employees living in Empowerment Zones; Supplemental Nutrition Assistance Program (SNAP) recipients; Supplemental Security Income (SSI) recipients; and long-term family assistance recipients.

Generally, employers request WOTC certification by submitting IRS Form 8850, Pre-screening Notice and Certification Request for the Work Opportunity Credit, to their state workforce agency (not to the IRS) within 28 days after an eligible worker begins work. A November 8, 2021 submission deadline applies to hires from two groups — Empowerment Zone qualified summer youth employees and designated community residents — starting work on or after January 1, 2021, and before October 9, 2021.

If you need assistance with your Form 8850, please contact your PPG Partners CPA or accountant.