The Work Opportunity Tax Credit (WOTC) is available to employers who hire and pay qualified wages to individuals who are certified members of targeted groups. The employer must receive certification from the designated local agency in order to claim the credit. The WOTC has been available only in the year the wages were paid or incurred causing taxpayers to file amended returns because of delays in the certification process. The IRS has recently instructed its auditors in a memo to allow employers to take the WOTC in the year in which they receive certification. The IRS does require taxpayers to be consistent in their method for claiming the credit but will allow for an initial transition year to convert to claiming in the certification year.
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