IRS Extends Work Opportunity Tax Credit

The American Taxpayer Relief Act of 2012 has been amended to extend the Work Opportunity Tax Credit(WOTC) through Dec. 31, 2013, for taxable employers and qualified tax-exempt organizations. Businesses can still take advantage of the WOTC savings, ranging from $2,400 and up to $9,600, for previous new hires.

The IRS has provided additional guidance and transitional relief for employers claiming the WOTC. Employers that hire members of targeted groups are provided additional time beyond the 28-day deadline for submitting the pre-screening and certification forms to designated local agencies (DLAs).

Employers that hire a member of a targeted group from Jan. 1, 2012 through March 31, 2013, other than a qualified veteran, will be considered to have satisfied the requirements if a completed Form 8850 to request certification is submitted to the DLA by April 29, 2013.

Target groups that could still qualify for the WOTC savings for previous new hires include:

• Ex-felons
• Recipients of assistance under Aid to Families with Dependent Children (AFDC) or its successor program, Temporary Assistance for Needy Families (TANF)
• Recipients of SNAP (food stamps)
• Recipients of Supplemental Security Income (SSI)
• Vocational rehabilitation referrals
• Designated community residents living in a Rural Renewal County
• Summer youth employees

As for the veteran target groups, employers that hire qualified veterans from Jan. 1, 2013, through March 31, 2013, have until April 29, 2013, to submit a completed Form 8850 to the DLA to request certification.

To take advantage of this tax credit opportunity, contact Doeren Mayhew’s dedicated Tax Incentives Group with CPAs in Troy, Houston and Ft. Lauderdale.