The IRS recently made an announcement that should be of great interest to those employers who take part in, or plan to take part in the Work Opportunity Tax Credit Program (WOTC). Those employers will be granted a temporary extension on the time allowed to file the Work Opportunity Credit (file Form 8850).
The WOTC credit had expired on December 31, 2013. The passing of a 2014 tax bill retroactively extended the WOTC to certain employees. Members of certain targeted groups must have started working for the employer during January through December 31, 2014. These groups include veterans, Temporary Assistance for Needy Families (TANF) recipients, food stamp recipients, Designated Community Residents, Vocational Rehabilitation Referrals, Ex-felons, Supplemental Income recipients and Summer Youth Employees. Some conditions apply in each respective group.
Some parties that don’t qualify include relatives and dependents of the employer, former employees (regardless of how much time has passed since they last worked for the business), and majority owners of the business.
The extension also reopens the door for employers who already participate in, or plan to participate in, the WOTC program but haven’t submitted applications they thought would be late under the 28 day submission rule.
Provisions have also been extended regarding the VOW to Hire Heros Act of 2001. This made the WOTC credit available as a credit against the employers Social Security tax for certain tax-exempt organizations that employ qualified veterans.
This presents the potential for valuable tax credits for employers who qualify. WOTC credits, which can be up to several thousand dollars, result in dollar for dollar tax liability reduction.
This one time window of potential opportunity closes on April 30, 2015. Holbrook & Manter is helping clients take advantage of this tax credit. Let us see if we can do the same for you. Contact us today.