Employer Credits Expiring Dec 31st: WOTC & Federal Empowerment Zone
Posted by Kirsten Meyer on Thu, Dec 29, 2011 @ 11:13 PM
The version of the Temporary Payroll Tax Cut Continuation Act that was passed by Congress last week was missing a number of extenders that had been originally included in the Senate version of the bill. Because of this, several employer credit programs will expire at year end on December 31, 2011, including the Work Opportunity Tax Credit (WOTC), the Indian Employment Credit, and the Federal Empowerment Zone Credit. Veterans groups under the WOTC are unaffected, as they were previously extended through the end of 2012 by the Veterans Opportunity to Work (VOW) to Hire Heroes Act of 2011.
Although nothing is certain, it is anticipated that these expirations will amount to only a temporary hiatus and will likely be corrected by a retroactive extension of the credits in early 2012 when Congress reconsiders the payroll tax cut extension.
When similar situations have occurred in the past, the state workforce agencies have continued to process all paperwork received from employers, but have postponed making WOTC certification determinations until retroactive authorization occurs. For that reason, despite the temporary uncertainty surrounding these credits, we suggest that employers continue to evaluate job applicants’ potential eligibility for WOTC eligibility and continue to submit IRS form 8850, Pre-Screening Notice and Request for Certification for the Work Opportunity Credit, in order to be in compliance with the statutory 28-day filing deadline, and not risk missing out on potential savings opportunities.
