Executive Perspectives – Work Opportunity Tax Credit

The Work Opportunity Tax Credit was one of the tax credits that was extended in the recent tax legislation.  While it was not made permanent, it did receive a five year extension (through 2019), and is applicable to any qualified new hire who began working after December 31, 2014.

The WOTC provides generous employment tax credits for employers hiring members of certain targeted groups, including:

  • Unemployed veterans
  • Recipients of Temporary Aid for Needy Families benefits
  • Food Stamp recipients
  • Empowerment Zone residents
  • Ex-Felons
  • SSI recipients
  • Summer youth employees residing in certain economic development zones

The extension was not enacted until December 18, 2015, so it is probable the IRS will issue a notice providing transition relief for employers who did not timely submit the WOTC application since the prior expiration date.  In previous years, when WOTC provisions expired, the IRS approved a 60-day window for companies to submit the full year’s new hires’ forms.

Beginning, January 1, 2016, all new hires/employees must complete the WOTC forms and submit to the appropriate agencies within 28 days of hire. Generally, if that period is missed, the credit is foregone.

Please call our office if you think that you might qualify to take advantage of this credit for your business.

Wertz & Company, LLP, is an Irvine Tax Accounting and Professional Services Firm located in Orange County, CA that specializes in working with entrepreneurs along their journey to success.