IRS highlights that WOTC screening must occur "on or before the date a job offer is made."
On September 19, 2022, the Internal Revenue Service issued IR-2022-159 providing updated information on the Work Opportunity Tax Credit (WOTC) pre-screening and certification process, including the timing of applicant screening.
The new IRS update highlights that both the employer and job applicant are required to complete a Form 8850: Pre-Screening Notice and Certification Request for the Work Opportunity Credit on or before the date a job offer is made.
Once a job applicant has been pre-screened, employers are required to submit the Form 8850 to the appropriate state workforce agency no later than 28 days after the employee's first day of work.
Previous guidance under the Targeted Jobs Tax Credit (TJTC), which preceded WOTC, did not contain a pre-screening requirement – all identification of TJTC eligible hires was done on the first day of work. When Congress enacted the WOTC in 1996, replacing the TJTC, they included the requirement that employers pre-screen applicants on or before the day a job offer is made to provide an incentive for employers to hire and retain certain categories of workers who have historically faced some type of barrier to employment.
To align with the fundamental purpose of the program and intent of Congress that employers should be aware of WOTC eligibility before any hiring decision is made, including contingent or conditional job offers, ensure your processes are aligned with screening "on or before the date of job offer."
The Work Opportunity Tax Credit program was designed to provide an incentive for employers to consider job applicants from targeted groups. Targeted groups include former felons, vocational rehabilitation referrals, Summer Youth program participants, and recipients of Supplemental Nutrition Assistance Program (SNAP) Supplemental Security Income (SSI), or long-term Unemployment benefits, among others.
- Read the full IRS Update
ADP Compliance Resources
ADP maintains a staff of dedicated professionals who carefully monitor federal and state legislative and regulatory measures affecting employment-related human resource, payroll, tax and benefits administration, and help ensure that ADP systems are updated as relevant laws evolve. For the latest on how federal and state tax law changes may impact your business, visit the ADP Eye on Washington Web page located at www.adp.com/regulatorynews.
ADP is committed to assisting businesses with increased compliance requirements resulting from rapidly evolving legislation. Our goal is to help minimize your administrative burden across the entire spectrum of employment-related payroll, tax, HR and benefits, so that you can focus on running your business. This information is provided as a courtesy to assist in your understanding of the impact of certain regulatory requirements and should not be construed as tax or legal advice. Such information is by nature subject to revision and may not be the most current information available. ADP encourages readers to consult with appropriate legal and/or tax advisors. Please be advised that calls to and from ADP may be monitored or recorded.
If you have any questions regarding our services, please call 855-466-0790.
One ADP Boulevard, Roseland, NJ 07068
Updated on November 2, 2022
Subscribe to SPARK updatesSign up