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Section references are to the Internal Revenue Code unless otherwise noted.
For the latest information about developments related to Form 8850 and its instructions, such as legislation enacted after they were published, go to www.irs.gov/form8850.
The Protecting Americans from Tax Hikes Act of 2015 made the following changes.
The work opportunity credit has been extended to cover certain individuals who began working for you after December 31, 2014, and before January 1, 2020. For information about transitional relief, see Who Should Complete and Sign the Form and When and Where To File.
Empowerment zone designations have been extended to cover 2015 and 2016. For details, see Empowerment Zones.
A new targeted group has been added for qualified long-term unemployment recipients who begin work after 2015. For details, see Members of Targeted Groups.
Employers use Form 8850 to pre-screen and to make a written request to the state workforce agency (SWA) of the state in which their business is located (where the employee works) to certify an individual as a member of a targeted group for purposes of qualifying for the work opportunity credit.
Submitting Form 8850 to the SWA is but one step in the process of qualifying for the work opportunity credit. The state work opportunity tax credit (WOTC) coordinator for the SWA must certify the job applicant is a member of a targeted group. After starting work, the employee must meet the minimum number-of-hours-worked requirement for the work opportunity credit. Generally, an employer elects to take the credit by filing Form 5884, Work Opportunity Credit. However, a tax-exempt organization that hires a qualified veteran should report the work opportunity credit on Form 5884-C, Work Opportunity Credit for Qualified Tax-Exempt Organizations Hiring Qualified Veterans.
If the job applicant will begin working for the employer after May 31, 2016, the job applicant gives information to the employer on or before the day a job offer is made. This information is entered on Form 8850. If the employer believes the applicant is a member of a targeted group (as defined under Members of Targeted Groups), the employer completes the rest of the form no later than the day the job offer is made. Both the job applicant and the employer must sign Form 8850 no later than the date for submitting the form to the SWA.
If the job applicant began working for the employer on or after January 1, 2015, and on or before May 31, 2016, Form 8850 can be completed and signed as described above at any time as long as it is completed, signed, and submitted to the SWA by June 29, 2016.
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