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Extension for Meeting Work Opportunity Tax Credit (WOTC) Certification Requirement


The WOTC was among those provisions extended through December 31, 2014, by the Tax Increase Prevention Act of 2014, which was passed last December. The credit is for employers that hire individuals who are members of targeted groups, including certain qualified veterans.


Taxable employers that hired targeted group members can claim the tax credit as a general business credit against their income tax. Before an employer can claim the credit, it must obtain certification from a “designated local agency” (DLA) that the hired individual is indeed a targeted group member. The employer normally must submit IRS Form 8850, “Pre-Screening Notice and Certification Request for the Work Opportunity Credit,” to the DLA no later than the 28th day after the individual begins work for the employer.


The retroactive extension of the WOTC for 2014 at the end of the year, however, meant that many employers would need additional time — the 28-day period had already expired for many of the covered employees hired in 2014. Thus, the IRS has given employers until April 30, 2015, to request certification from their DLAs for members of targeted groups hired in 2014.


A timely request for certification does not eliminate the need for an employer to receive a certification before claiming the credit, though. So employers may need to file for a tax return extension.


Please contact our office if you have any questions on obtaining the WOTC credit and meeting necessary qualifications.