IRS further extends due date for employers to claim Work Opportunity Tax Credit

The IRS recently announced an extension of previously existing transitional relief for employers who want to claim the Work Opportunity Tax Credit (WOTC) for new 2015 hires. This extension gives employers until Sept. 28, 2016, to file the forms necessary to claim the credit for eligible employees. Employers wishing to claim the credit are required to file Form 8850, Pre-Screening Notice and Certification Request for the Work Opportunity Credit, and are encouraged to submit ETA Forms 9061 or 9062 together in the same submission to minimize burdens and the possibility of processing delays.

Filing Form 8850 is a prerequisite to claiming the WOTC for the new hire. Typically, the form is due no later than 28 days after the new employee begins work; however, the credit was extended retroactively by the Protecting Americans from Tax Hikes Act of 2015. This new Notice gives employers an extra three months to file the necessary forms to claim the credit for certain eligible workers.

Other than extending the period of transition relief, Notice 2016-40 does not modify or add to the guidance provided in Notice 2016-22.

Employers who hired a member of a targeted group on or after Jan. 1, 2015, and before Aug. 31, 2016, will be considered to have timely filed Form 8850 as long as it is filed with the designated local agency by Sept. 28, 2016. If you hired targeted employees during the past year, we urge you to contact your tax professional [B1] to get the necessary certifications in place in order to maximize your credit for 2015.

View a more detailed explanation of eligible WOTC employees.

For more information on this topic, or to learn how Baker Tilly tax specialists can help, contact our team.


The information provided here is of a general nature and is not intended to address the specific circumstances of any individual or entity. In specific circumstances, the services of a professional should be sought. Tax information, if any, contained in this communication was not intended or written to be used by any person for the purpose of avoiding penalties, nor should such information be construed as an opinion upon which any person may rely.  The intended recipients of this communication and any attachments are not subject to any limitation on the disclosure of the tax treatment or tax structure of any transaction or matter that is the subject of this communication and any attachments.