CMS Work Opportunity Tax Credit Newsletter September 2021
Our offices are closed on Monday, September 6th in observance of Labor Day!
Have a safe and happy Labor Day!
In this issue:
- Reminder to Customers: Send WOTC Surveys Within 28 Days of Employee’s Start Date
- Work Opportunity Tax Credit (WOTC) Transition Relief under Internal Revenue Code § 51
- WOTC Wednesday: Does Your Software Program Allow for Checking WOTC Application Status?
- Understanding WOTC’s Target Groups: Long-Term Family Assistance Recipient
- Work Opportunity Tax Credit Statistics for Wisconsin
- Make the Switch To Paperless WOTC Screening
Because of the WOTC 28 Day Rule CMS has just 28 days from the employee’s start date to submit your forms to the respective state agency for processing. The 3 week suggestion is to make sure our team of administrators has time to screen and process your WOTC applications.
WOTC Hours and Wages
If you have received a request for hours and wages from our WOTC team, please be sure to reply as soon as possible. CMS needs to have hours and wages, along with term dates for any terminated employees in order to calculate the value of your tax credits. Contact Lisa or Sean with any questions.
The IRS issued guidance last month providing additional transition relief to employers participating in the work opportunity tax credit program. Notice 2021-43 (PDF) provides transition relief for employers that hire or hired certain individuals residing in empowerment zones and who begin work on or after January 1, 2021, and before the date that is 60 days from the date of publication of the notice.
CMS’s Brian Kelly answers your questions about the Work Opportunity Tax Credit in our weekly video Q&A series #WOTCWednesday.
Other Recent WOTC Questions Answered:
- How Long Must an Eligible Employee Work to Claim WOTC?
- Are We Eligible for Employees Who Receive SNAP Benefits While Working?
- When Is The Best Time To Give the WOTC Survey To The Applicant?
New hires who fall under one or more of WOTC’s Target Groups may make you eligible for a WOTC Tax Credit. Target Group #9 is the Long-Term Family Assistance Recipient. 70,864 individuals were hired with certification from this group in 2020, 4.37% of the total, making it the third most used category, second behind Veteran categories. Long-Term Family Assistance Recipient is one of WOTC’s most valuable categories with tax credit of up to $9,000 over two years.
A “long term family recipient” is an individual who at the time of hiring is a member of a family that meet one of the following conditions:
- Received assistance under an IV-A program for a minimum of the prior 18 consecutive months; OR
- Received assistance for 18 months beginning after 8/5/1997 and it has not been more than 2 years since the end of the earliest of such 18-month period; OR
- Ceased to be eligible for such assistance because a Federal or State law limited the maximum time those payments could be made, and it has been not more than 2 years since the cessation.
In 2020 the state of Wisconsin issued 39,728 Work Opportunity Tax Credit certifications. Wisconsin issued 2.45% of all WOTC Tax Credits in 2020, and the most overall. SNAP was Wisconsin’s highest tax credit category with 53% of certifications for that category.
CMS has been providing Work Opportunity Tax Credit screening services for over 20 years. We have helped save employers millions of dollars that can be reinvested back into their businesses. We highly encourage customers to take advantage of the online WOTC screening form that we developed or the call center, both of which provide several benefits to you.
- Your WOTC Dashboard
- Increased Integration for WOTC Tax Credit to iRecruit, Applicant Tracking Software
- Work Opportunity Tax Credit By The Numbers 2020
- EEOC Issues Formal Opinion on the Work Opportunity Tax Credit
- Important Notice: URL Changes for Online WOTC Forms
- WOTC’s 28-Day Rule Explained
- WOTC’s Target Groups
- Calculate your WOTC Savings
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Related: WOTC Newsletter Archive