Employers claiming the Work Opportunity Tax Credit (WOTC) will be provided relief by the IRS.
What is the WOTC?
A federal income tax credit available to employers that hire certified members of certain groups who face significant barriers to employment: Designated Community Residents or Qualified Summer Youth Employees.
The IRS has issued Notice 2021-43, which extends the deadline for employers to submit a request to a designated local agency (DLA). If you have hired an employee between January 1 and October 8 of this year that is a Designated Community Resident or a Qualified Summer Youth Employee under the WOTC, you now have until November 8, 2021, to submit Form 8850. The transition relief under this notice provides guidance to certain employers who submitted the Form 8850 to a DLA and received a denial due to the termination of Empowerment Zone designations on December 31, 2020, or who received a certification before Empowerment Zone designations were extended.
The amount of tax credit a business is eligible for under WOTC is equal to a percentage of qualified wages that were paid in a given tax year to an employee certified by DLA as being a member of one of these certain groups.
Continue to follow along with the Bryson Law Firm, LLC blog for tax and firm updates!