Important Notices In January 2013, the WOTC program was reauthorized and extended to Dec 31, 2013.
- All Veterans provisions were extended.
- All Non-Veterans provisions in effect on Dec 31, 2011 were retroactively reinstated through Dec 31, 2013.
- Oregon will process all non-veteran WOTC applications received during the hiatus.
- Qualified “tax-exempt” (i.e., 501(c)) organizations continue eligibility by hiring qualified veterans.
- Non-veteran target groups do not qualify tax-exempt orgranizati0ons for the credit.
- 2009 Recovery Act Disconnected Youth and Unemployed Veteran target groups were NOT reauthorized.
Transition ReliefOn March 8, 2013, IRS Notice 2013-14 was released. The Notice provides transition relief to employers regarding their submission of Form 8850.
Normally, the Pre-Screen Notice (IRS Form 8850) is completed by the job applicant and employer on or before the individual is offered the job. The employer then mails WOTC forms within 28 days of when the employee starts work. Under the transition relief provisions, both the requirement to complete the form prior to job offer and the 28-day deadline are extended for two different groups of employees.
- For employees from the non-veteran target groups hired during the 15 month period between January 1, 2012 and March 31, 2013, the deadline for completing and submitting the documents has been extended to April 29, 2013.
- Employees from the veteran target groups hired during the 3 month period between January 1, 2013 and March 31, 2013, the deadline for completing and submitting the documents has been extended to April 29, 2013.
In simple language, this means that an employer can go back, and if the new hire was employed within the relevant time frame (i.e., by March 31, 2013), the employer and employee can fill out an IRS Form 8850, sign and date it, and submit it to the State by April 29, 2013.
For employees hired after March 31, 2013, both the requirement to complete pre-screening prior to job offer and the 28-day submission deadline apply—regardless of the target group.
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The Work Opportunity Tax Credit (WOTC) is a Federal tax credit, and it is designed as an incentive for businesses to hire individuals that consistently face significant barriers to employment. The main objective of this program is to enable the targeted employees to gradually move from economic dependency into self-sufficiency as they earn a steady income and become contributing taxpayers. Participating employers are compensated through a reduced federal income tax liability. WOTC joins other workforce programs that help incentivize workplace diversity and facilitate access to good jobs for American workers.
Eligible Workers
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DOL Category
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Categories of Eligible Veterans
|
Qualified First-Year Wages Used To
Determine Credit
(Maximum Considered)
|
Hours Worked in First-Year
|
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>= 400 hrs
|
120 to 399 hrs
|
|
Credit is 40% of Qualified
First-Year Wages
|
Credit is 25% of Qualified
First-Year Wages
|
|
2Ba
|
Veterans that received food stamps (Supplemental Nutrition
Assistance Program, or SNAP) for 3 consecutive months during the 15 months
prior to the hire date.
|
$6,000
|
$2,400
|
$1,500
|
|
2Bb
|
Veterans entitled to compensation for a service-connected
disability and discharged from the military during the year
prior to the hire date.
|
$12,000
|
$4,800
|
$3,000
|
|
2Bc
|
Veterans entitled to compensation for service-connected
disability and unemployed for at least 6 months during the year
prior to the hire date.
|
$24,000
|
$9,600
|
$6,000
|
|
2Bd
|
Veterans unemployed for at least 4 weeks, and less than 6
months, during the year prior to the hire date.
|
$6,000
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$2,400
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$1,500
|
|
2Be
|
Veterans unemployed for at least 6 months during the year prior
to the hire date.
|
$14,000
|
$5,600
|
$3,500
|
|
|
|
|
|
|
|
|
|
|
|
DOL Category
|
Categories of Eligible Non-Veterans
|
Qualified First-Year Wages Used To
Determine Credit
(Maximum Considered)
|
Hours Worked in First-Year
|
|
>= 400 hrs
|
120 to 399 hrs
|
|
Credit is 40% of Qualified
First-Year Wages
|
Credit is 25% of Qualified
First-Year Wages
|
|
A
|
Member of a family that received TANF assistance for 9 of the 18
month period ending on the hire date.
|
$6,000
|
$2,400
|
$1,500
|
|
C
|
Convicted of a felony or released from prison after a felony
conviction during the year period ending on the hire date.
|
$6,000
|
$2,400
|
$1,500
|
|
D
|
Designated Community Resident age 18 to 39
|
$6,000
|
$2,400
|
$1,500
|
|
E
|
Referred to an employer by a Vocational Rehabilitation Agency,
approved the by the state, while on or after completion of an individual
employment plan.
|
$6,000
|
$2,400
|
$1,500
|
|
F
|
Qualified Summer Youth age 16 to 17.
|
$3,000
|
$1,200
|
$750
|
|
G
|
Member of a family that received SNAP (Food Stamps) benefits for
at least the 6 months period ending on the hire date, OR received SNAP
benefits for the 3 out of the 5 months
ending on the hire date and are no longer receiving them. Must be age 18 to
39.
|
$6,000
|
$2,400
|
$1,500
|
|
H
|
Received Supplemental Security Income (SSI) benefits for any
month ending within 60 days of the hire date.
|
$6,000
|
$2,400
|
$1,500
|
|
|
|
|
|
|
Long-Term TANF (Category I) is unique and is noted out of
sequence
|
|
|
|
|
I
|
Member of a family that received TANF assistance for at least
the 18 month period ending on the hire date,
OR received at least 18 months of assistance beginning after August 5, 1997
with the earliest 18-month period ending within 2 years of the hire date,
OR your TANF eligibility ended within two years of the hire date.
|
Qualified First-Year Wages Used To
Determine Credit
(Maximum Considered)
|
Hours Worked in First-Year
|
|
>= 400 hrs
|
120 to 399 hrs
|
|
Credit is 40% of Qualified
First-Year Wages
|
Credit is 25% of Qualified
First-Year Wages (capped at $6,000)
|
|
$10,000
|
$4,000
|
$1,500
|
|
|
|
|
Qualified Second-Year Wages Used To
Determine Credit
(Maximum Considered)
|
Hours not addressed in Second-Year
|
|
|
|
|
Credit is 50% of Qualified
Second-Year Wages
|
|
|
$10,000
|
$5,000
|
|
How to apply To qualify for the tax credit, the employer must apply for and receive an Employer Certification. To request certification:
- Have the potential new hire complete page one of the Pre-Screening Notice (IRS Form 8850) by the day of job offer.
- If the new employee indicates potential WOTC eligibility on page one of Form 8850, complete page two of this form.
- Important: There are four date blocks on page two. The date blocks must show that the applicant provided the information (completed the front side of the form 8850) before or on the day the job is offered. Why? Because the applicant is required to provide information about potential WOTC eligibility before they are offered the job.
- Have the new hire complete ETA Form 9061 (Individual Characteristics Form) after they start.
- If the new employee is a veteran, please include a copy of their DD 214. If they are a disabled veteran, include a copy of their VA letter showing their VA rating (percentage of disability). If you cannot get these documents right away, please include a note letting us know that you will be sending the document soon.
- Why is this important? If you include the DD 214 or VA letter, we will move your application to the front of the line for processing. However, without those additional documents, it will be necessary for you to have the new employ sign a VA Informed Consent Form so we can request the information from the VA – which is a longer process.
- Request certification by mailing the completed Pre-Screening Notice and Certification Request for the Work Opportunity Credit, Individual Characteristics Form, and any supporting documents within 28 calendar days after the applicant starts work to:
Oregon Employment Department
WOTC Unit, Room 201
875 Union Street NE
Salem, OR 97311
Important Notes:
• The timeliness of the request is determined by postmark date.
• Oregon does not accept electronic submission of forms. All forms must be mailed to the WOTC Unit.
Please note that the timely filing provision is part of the eligibility criteria for the tax credit. The timeliness requirement cannot be waived. Incomplete applications are not accepted.
If the request is timely and the applicant is eligible, an Employer Certification will be returned to the business authorizing the tax credit.
At the end of the tax year, claim the credit on your WOTC certified employee(s) by completing IRS Form 5884.
Filing reminders
Due to the high volume of incoming applications, the WOTC Unit is unable to verify receipt of applications. Use of certified mail or equivalent is recommended for confirming receipt of any application.
Federally subsidized on-the-job training (OJT) programs and the WOTC For a potential WOTC target group member that is about to begin an On-the-Job Training (OJT) program, mail a completed certification request to the WOTC Unit no later than 28 calendar days after the individual begins the OJT experience. The OJT start date is treated as the employment start date when determining Employer Certification eligibility.
For specific WOTC information and forms: Link to IRS 8850.
Link to ETA 9061.
Link to VA Informed ConsentContact the Oregon Employment Department at 1-800-237-3710 ext. 71478, or your nearest Employment Department field office for copies of the IRS Form 8850.