The IRS has issued additional transition relief (Notice 2016-40) for employers who claim the
work opportunity tax credit (WOTC) for employees hired between Jan.
1, 2015, and Aug. 31, 2016.
WOTC originally expired for employees hired beginning in 2015
but was reinstated retroactively late in the year. The Protecting
Americans from Tax Hikes Act of 2015 (PATH Act) retroactively
extended the credit to cover qualified employees hired between Jan.
1, 2015, and the end of 2019. The PATH Act also created a new
eligible category for long-term unemployed new hires beginning in
2016.
To qualify for the credit, employers must generally obtain a
certification of eligibility from a designated local agency on or
before the day an employee begins work or file a Form 8850,
"Pre-Screening Notice and Certification Request for the Work
Opportunity Credit," within 28 days of when the employee
begins work.
