What Is The Purpose Of This Form?
Form 8850 is filed by an employer with their local state workforce agency (SWA) to certify that an individual that was hired is from a targeted group. Once certification is received, the employer can file any of the applicable forms below to receive the work opportunity tax credit (WOTC), up to $2,400 per employee.
Form 5884 Work Opportunity Credit
Form 5884-C Work Opportunity Credit for Qualified Tax-Exempt Organizations Hiring Qualified Veterans
Form 8850 must be filed, on or before the employee starts work, or no more than 28 days after the employee starts work, to the employer's local SWA. Employers can hire eligible employees from any of the listed target groups to receive the WOTC.
List of Targeted Groups
- Designated Community Resident (DCR)
- Ex-Felon
- Long-Term Family Assistance Recipient
- Qualified IV-A Recipient
- Qualified Long-Term Unemployment Recipient
- Qualified Veteran
- Summer Youth Employee
- Supplemental Nutrition Assistance Program (SNAP) Recipient
- Supplemental Security Income (SSI) Recipient
- Vocational Rehabilitation Referral
Eligibility
Employers of all sizes are eligible to claim the WOTC for employers who have taxable income and certain tax-exempt employers. Employers with taxable income can claim the WOTC against income taxes. Certain tax-exempt employers can claim the WOTC against the portion of social security tax on wages paid to all employees during the period beginning a qualified veteran begins working for the organization or during the time when located in a qualified disaster zone.
What Are Latest Developments That Are Relevant To Me?
Notice 2021-43. If you hired a designated community resident or a summer youth employee who begins work on or after January 1, 2021, and before October 9, 2021, then you can submit this form no later than November 8, 2021. Learn more.
Revenue Procedure 2021-18. It provides an automatic procedure for a state or local government, in which an empowerment zone is located, to extend the empowerment zone designation until December 31, 2025. The guidance applies to urban or rural areas in which an empowerment zone is located. Learn more.
Wort opportunity tax credit extended. The Consolidated Appropriation Act, 2021 (Section 113 of Division EE P.L. 116-260) authorized the extension of the Work Opportunity Tax Credit (WOTC) until December 31, 2025.
What Does The Form Look Like?
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