With the passage of the Protecting Americans from Tax Hikes (PATH) Act of 2015 in December, WOTC has been extended through December of 2019. Given the original 28-day filing requirement, you now have until June 29, 2016, to submit Form 8850 to a designated local agency (“DLA”) to obtain certification for eligible employees hired in 2015.  

What’s the WOTC?

WOTC is a federal income tax credit incentive provided to private sector employers when they hire from certain target groups of job seekers who face employment barriers. The WOTC tax credit is a one-time tax credit for each new hire – and there is no limit to the number of new hires who can qualify an employer for a tax credit.

WOTC targeted groups

The WOTC is generally 40 percent of the first $6,000 of qualified wages, although actual credit amounts can vary by targeted group. Targeted groups may include:

  • Qualified IV-A recipients
  • Qualified veterans
  • Qualified ex-felons
  • Vocational rehabilitation referrals
  • Qualified summer youth employees
  • Designated community residents at least 18 years of age, but under age 40
  • Qualified food stamp recipients
  • Qualified supplemental security income recipients
  • Long-term temporary assistance recipients
  • (2016) Qualified long-term unemployment recipients (i.e., those who have been unemployed for 27 weeks or more)

WOTC Form 8850

WOTC Form 8850 is the notice and certification request designed to help you identify individuals who will qualify under WOTC and bring you the highest possible credits. To help employers with the process of collecting this information, we developed the Work Opportunity Credit Form 8850 for Sage HRMS HR Actions, a web-based version of the form.

 

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Joe Rotella, SPHR, SHRM-SCP
Joe Rotella, SPHR, SHRM-SCP
Chief Marketing Officer at Delphia Consulting
Joe is a leading thinker and a professional speaker in the areas of HR technology, marketing, and web usability. He is a well-recognized speaker for the Society of Human Resources Management.