What's New in WOTC
On April 17, 2015, ETA issued TEGL 28-14, "Reauthorization of the Work Opportunity Tax Credit (WOTC) Program for 2014 and Authorization Lapse for 2015." The TEGL instructed States to hold 2104 certifications for the Summer Youth Employee (SYE) and Designated Community Resident (DCR) target groups, pending notice from the Internal Revenue Service (IRS) that the Empowerment Zone (EZ) designations were extended through December 31, 2014.
IRS Notice 2015-26, "Empowerment Zone Designation Extension," provided guidance to local areas on how to amend or decline the extension of their Empowerment Zone designation through December 31, 2014, as authorized under the Tax Increase Prevention Act (TIPA) of 2014. On June 15, 2015, IRS issued IR-2015-88, attached below, announcing that all Empowerment Zone designations in effect for 2013 were extended through December 31, 2014 in compliance with TIPA.
States with EZs that held the processing or the release of eligibility determinations for the target group individuals residing in the EZs should now process and issue all determinations for the SYE and DCR target groups for new hires in 2014 that were received timely within the transitional relief period set forth by IRS, which ended on April 30, 2015. The hold for these target groups has been lifted, and states should process 2014 requests for certification incorporating their 2013 EZs as effective, valid designations throughout the December 31, 2014 WOTC reauthorization period.
The IR-2015-88 news release is available at http://www.irs.gov/uac/Newsroom/Empowerment-Zone-Designations-Continue-Through-the-End-of-2014.
IRS just published a notice of transition relief for WOTC, meaning that employers have additional time to submit their requests for 2014 WOTC certification. The relief period allows employers to submit WOTC certification requests until April 30, 2015, if they hired a member of a targeted group between January 1, 2014 and December 31, 2014.
Any State Workforce Agency (SWA) that has already issued denials to an employer that would otherwise have been approved under the transitional relief period should revisit those denials and re-process them, applying the IRS relief period, and reissuing determinations to those employers or consultants. SWAs should only issue a certification, if the certification request otherwise met all other requirements, including that new hires were employed between January 1, 2014 and December 31, 2014, and that the new hire met all the target group's eligibility criteria.
IRS Notice 2015-13 is available here: http://www.irs.gov/pub/irs-drop/n-15-13.pdf.
The legislative authority for the WOTC program, which had expired on December 31, 2013, has been extended. President Obama signed the tax extension bill (the Act) on December 19, 2014. The current Act extends the WOTC program through December 31, 2014, and retroactively reauthorizes the program for new employees hired on or after January 1, 2014. At this time, the Department of Labor is working with the Internal Revenue Service (IRS) to issue reauthorization guidance to the state workforce agencies and the employer community. Employers should continue to submit WOTC applications to state workforce agencies within 28 calendar days after the new hire's start date. For further information, visit the IRS WOTC Website, view ETA's Interim Instructions on the 2014 Reauthorization and 2015 Hiatus, or look for updates on ETA's national WOTC website at www.doleta.gov/WOTC/ under "What's New."
Have a question on WOTC? Send your question to Ask.WOTC@dol.gov. This new email makes it possible to provide timely and expert advice to anyone with questions about the program. Staff look forward to providing any requested information and assistance. We encourage you to contact us via this email address.
EMPLOYERS and CONSULTANTS: Your certification requests for each new employee hired must be sent to your state workforce agency -- NOT to the U.S. Department of Labor (DOL) in Washington, D.C.
DOL returns all misrouted mail received directly to the employer or consultant. Submitting the application to your state's workforce agency will ensure you have timely filed your application within 28 days after each new hire's start date.