UPDATE: On October 4, 2004, the President signed into law the Working Families Tax-Relief Act of 2004 (P.L. 108-311). This legislation extends the WOTC program and the WtW tax credits, without change, for a two-year period through December 31, 2005. The reauthorization is retroactive to December 31, 2003 and applies to new hires that begin work for an employer after December 31, 2003 and before January 1, 2006.

WHAT NEW HIRES CAN QUALIFY EMPLOYERS FOR WOTC?

• WOTC applies only to new employees hired after September 30, 1996, and before January 1, 2006
• The new employee must belong to one of nine target groups:
  • A member of a family that is receiving or recently received Temporary Assistance to Needy Families (TANF) or Aid to Families with Dependent Children (AFDC),
  • An 18-24 year old member of a family that is receiving or recently received Food Stamps,
  • An 18-24 year old resident of one of the Federally designated Empowerment Zones (EZs), Enterprise Communities (ECs), or Renewal Communities (RCs),
  • A 16-17 year old EZ/EC or RC resident hired between May 1 and September 15 as a Summer Youth Employee,
  • A veteran who is a member of a family that is receiving or recently received Food Stamps,
  • A disabled person who completed or is completing rehabilitative services from a State or the U.S. Department of Veterans Affairs,
  • An ex-felon who is a member of a low income family,
  • A recipient of Supplemental Security Income (SSI) benefits, and/or
  • The New York Liberty Zone Business Employee (requires no certification).

• All new adult employees must work a minimum of 120 or 400 hours;  Summer Youth must work at least 90 days, between May 1 and September 15.

HOW CAN EMPLOYERS PARTICIPATE IN THE WOTC?

To receive certification that a new employee qualifies the employer for this tax credit, the employer must:

1. Complete the one page IRS Form 8850 by the day the job offer is made.
   
   
2. Complete either the one page ETA Form 9061 or Form 9062
   • If the new employee has already been conditionally certified as belonging to a WOTC target group, complete the bottom part of ETA Form 9062 (and sign and date it), that he or she has been given by a State Employment Security Agency or participating agency.
   • If the new employee has not been conditionally certified, the employer and/or the new employee must fill out and complete, sign and date ETA Form 9061
   
   
3. Mail the signed IRS and ETA forms to the employer's State Workforce Agency.  The IRS form must be mailed within 21 days of the employee's employment-start date.

To get IRS Form 8850, the Work Opportunity and Welfare-to-Work Tax Credits Pre-Screening Notice and Certification Request, and instructions, download from http://www.irs.ustreas.gov/ or call 1-800-829-1040.

You can get ETA Form 9061, the WOTC “Individual Characteristics Form,” a brochure, and  directories of the State and Regional Coordinators by visiting www.uses.doleta.gov/tax.asp

FOR MORE INFORMATION ABOUT THE WOTC AND THE WtW TAX CREDIT

Call or visit your local public State Workforce Agency WOTC Coordinator (use the above mentioned State Directory)

Call the U.S. Department of Labor Regional WOTC Coordinator nearest you (use the above mentioned Regional Directory)

Call Karin Loverud at the Internal Revenue Service (IRS) at 202-622-6080

For information about EZ/EC/RC locations, visit their website at http://www.hud.gov/offices/cpd/economicdevelopment/
programs/rc/index.cfm or call 1-800-998-9999.

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