HIGHLIGHTS OF THE NEW WORK OPPORTUNITY TAX CREDIT LAW
- The WOTC law was renewed as part of the “budget deal” signed into law by President Obama on December 16, 2015. (Click here for full text of Rules Committee Print Order 114-40.)
- This renewal is for 5 years, back-dated to January 1, 2015 through the end of 2019. The renewal period now provides this employer incentive with much needed stability.
- A new category was added: “Long-term unemployed” (LTU) is defined as someone seeking work for more than 27 weeks and received unemployment benefits during all or part of that 27 weeks.. This is important for reentry efforts as employers of felons who were released more than a year ago will often be eligible under this additional category.
- Per newly-issued IRS Regulation 2016-22 (linked below), employers have until June 29, 2016 to submit employees under this new category.
- Employers who hired a WOTC-eligible employee since January 1, 2015 are not subject to the normal requirement of applying for the credit within 28 days of the employee’s “start date.” Per Regulation 2016-22 (linked below) employers now have until May 31, 2016 to submit employees under the categories other than the LTU. (Remember: This means all employers who hired a felon in 2015 are still eligible to obtain this incentive.)
- Link to IRS Rule 2016-22: https://www.irs.gov/pub/irs-drop/n-16-22.pdf
- As the new Rule references, the IRS is in the process of developing new filing forms to encompass these changes. As they are published we will get them to you.