Employers with employees living in designated empowerment zones have another opportunity to apply for Work Opportunity Tax Credits (WOTC).
The IRS announced that tax credits for WOTC Target Group D, which consists of individuals ages 18-39 who when hired are residents of an empowerment zone, have been extended. In Notice 2018-47, employers will now be able to earn WOTC certifications for employees that met the requirements of Target Group D: empowerment zone residents through the duration of 2017.
The notice specifically states, “Any nomination for an empowerment zone designation with a current termination date of December 31, 2016, is deemed to be amended to provide for a new termination date of December 31, 2017, unless the nominating entity sends written notification to the IRS by July 3, 2018.”
Organizations that were receiving denials or on-holds for WOTC submissions for empowerment zone eligible candidates through 2017 should seek certification approval notices. Review your records to make sure you’re getting all of the certifications to which you are entitled. Use IRS Form 8844 when filing with the IRS to obtain recognition of your tax credits for 2017.
This may require some heavy lifting for your HR department. For that reason, consider outsourcing to a third-party specialist to earn certifications sooner and alleviate the burden for your staff. A third party will be able to help gather the denial letters that were sent before the extension for empowerment zone employees was issued for 2017.
Many specialists utilize an online platform, like TaxAdvantage, to manage their WOTC process. These programs make managing WOTC submissions and candidate applications easier and more efficient. The intuitive process, central data storage, and easily accessible functionality will reduce those piles of paper applications in your office and make it much easier to recall and retain job applicant and employee records.
Employers should make sure they are earning all of the WOTC certifications they are eligible for. If you aren’t participating in a program, now is always the right time to get started.