The Washington Report
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September 21, 2022
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Other HR/Employment
IRS Updates Information on WOTC; Assisting Employers in Hiring Certain Categories of Employees
On September 19, 2022, the Internal Revenue Service (IRS) updated information on the Work Opportunity Tax Credit (WOTC), available to employers that hire designated categories of workers who face significant barriers to employment. The updates include information on the pre-screening and certification process. To satisfy the requirement to pre-screen a job applicant on or before the day a job offer is made, a pre-screening notice (Form 8850, Pre-Screening Notice and Certification Request for the Work Opportunity Credit) must be completed by the job applicant and the employer.
The Targeted Jobs Tax Credit (TJTC), which preceded WOTC, did not contain a pre-screening requirement. In enacting WOTC to replace the TJTC in 1996, Congress included the requirement that employers pre-screen job applicants before or on the same day the job offer is made. In doing so, Congress emphasized “that the WOTC is designed to incentivize the hiring and employment of certain categories of workers.” After pre-screening a job applicant, an employer must then request certification by submitting Form 8850 to the appropriate state workforce agency no later than 28 days after the employee begins work. Other requirements and further details can be found in the instructions to Form 8850.
The news release is available here.
The Form 8850, Pre-Screening Notice and Certification Request for the Work Opportunity Credit website (with all current updates) is available here.
Instructions for Form 8850 are available here.