Employers who didn’t screen their 2014 new hires for the previously renewed Work Opportunity Tax Credit (WOTC) are in luck: On February 19 the IRS issued guidance allowing taxpayers to retroactively screen 2014 new hires for qualifying employees—which means employers have one more chance to apply for the credit. Those who wish to take advantage of this opportunity will need to submit forms showing they qualified by April 30, 2015.

About the Credit

The WOTC—a federal credit distributed at the state level—is designed to encourage businesses to hire individuals facing barriers to employment, such as veterans, ex-felons, and those receiving government assistance. Depending on which target group the individual qualifies under, the maximum credit per new hire can range from $2,400 to $9,600. The allowable credit is based on the number of hours worked and the wages earned during the period of employment.

Submit Forms by April 30

In general, to be eligible to claim the credit, employers must apply within 28 days of a new hire’s start date and receive a certification from a state workforce agency. However, due to the sunset of the program at the end of 2013 and subsequent retroactive extension through the end of 2014, the IRS is allowing employers to go back and apply for the WOTC by screening individuals hired between January 1, 2014, and December 31, 2014, and submitting the qualified forms no later than April 30, 2015.

As a reminder, employers cannot claim the WOTC until a certification has been issued by a state workforce agency confirming the employee is a member of targeted group.

We Can Help

Our fully automated screening tool, MaxCredits™, can help you meet the April 30 deadline. To learn more about MaxCredits™ and take advantage of this tax-saving opportunity, contact your Moss Adams professional. Or reach out to:

Rob O’Neill
National Leader, State Credits & Incentives
Partner, State & Local Tax Services
(503) 478-2339 | rob.oneill@mossadams.com

MaryCaitlin Willcuts
Manager, State Credits & Incentives
(503) 478-2309 | marycaitlin.willcuts@mossadams.com