Deadline for Submitting Work Opportunity Pre-Screening Requests Extended (Notice 2016-40)

CCH Tax Day Report

The IRS has provided additional transition relief for employers claiming the Work Opportunity Tax Credit (WOTC) under Code Secs. 51 and 3111(e), as extended and amended by the Protecting Americans from Tax Hikes (PATH) Act of 2015 (P.L. 114-113). The new guidance expands and extends by three months the transition relief provided in Notice 2016-22, I.R.B. 2016-13, 488, for meeting the 28-day deadline in Code Sec. 51(d)(13)(A)(ii).

The guidance applies to employers that: (1) hire members of targeted groups (other than qualified long-term unemployment recipients) on or after January 1, 2015, and on or before August 31, 2016; or (2) hire members of the new targeted group of qualified long-term unemployment recipients on or after January 1, 2016, and on or before August 31, 2016. The guidance does not otherwise modify or add to the guidance provided under Notice 2016-22.

In Notice 2016-22, employers claiming the Work Opportunity Credit for targeted group members were granted an extension of time to submit, Form 8850, Pre-Screening Notice and Certification Request for the Work Opportunity Credit, to its Designated Local Agency (DLA) to certify targeted group members hired from January 1, 2015, through May 31, 2016. The extension was granted due to the retroactive reinstatement of the Work Opportunity Credit to apply to targeted group members hired in 2015 and the need to revise Form 8850 to reflect the addition of qualified long-term unemployment recipients to the list of targeted groups that qualify for the work opportunity credit effective for individuals hired on or after January 1, 2016. Form 9061, Individual Characteristics Form, and Form 9062, Conditional Certification, which may be submitted with Form 8850, were also revised to reflect the addition of qualified long-term unemployment recipients to the list of targeted group members.

Notice 2016-40, 2016FED ¶46,352

Other References:

Code Sec. 51

CCH Reference – 2016FED ¶4803.28

CCH Reference – 2016FED ¶4803.65

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CCH Reference – TRC BUSEXP: 54,262.05

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