The Inner Income Service is giving employers extra leeway in claiming the Work Alternative Tax Credit score to rent individuals in underprivileged areas who face important obstacles to employment for jobs in summer season youth and group packages.
The IRS issued Discover 2021-43 final week, which extends the 28-day deadline for employers to submit a request to a chosen native company to certify that an worker employed between Jan. 1 and Oct. 8, 2021 needs to be thought of a Designated Group Resident or a Certified Summer season Youth Worker. To be licensed as a Designated Group Resident or a Certified Summer season Youth Worker below the WOTC, an worker is required to have a principal place of residence inside an Empowerment Zone the place the worker constantly resides.
Empowerment zone designations ended on Dec. 31, 2020, however the Taxpayer Certainty and Catastrophe Tax Aid Act of 2020, which was enacted as a part of the Consolidated Appropriations Act, 2021, allowed the designations to be prolonged by way of 2025. On Could 26, 2021, all empowerment zone designations had been prolonged from Dec. 31, 2020 to Dec. 31, 2025. The transition reduction below this discover permits employers to submit Kind 8850 (Pre-Screening Discover and Certification Request for the Work Alternative Credit score) for these workers till Nov. 8, 2021.
The IRS headquarters constructing in Washington, D.C.
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The empowerment zone program has been overshadowed lately by the chance zone program that was launched as a part of the Tax Cuts and Jobs Act, however the older program is being prolonged till at the very least 2025 to assist communities that stay economically deprived.
The brand new IRS discover additionally gives steering to employers who submitted a Kind 8850, “Pre-Screening Notification and Certification Request for the Work Alternative Credit score,” to a chosen native company for workers through the interval of transition reduction and obtained a denial as a result of termination of empowerment zone designations on Dec. 31, 2020, or who obtained a certification earlier than empowerment zone designations had been prolonged.
The WOTC has been by way of a number of legislative extensions and modifications because it was launched below the Small Enterprise Job Safety Act of 1996. The quantity of the tax credit score below WOTC equals a share of certified wages paid in a given tax 12 months to an worker licensed by the DLA as being a member of one of many teams specified below the legislation.