Work Opportunity Tax Credit

The IRS released their guidance to businesses that wish to claim a newly expanded work opportunity tax credit for unemployed veterans and unskilled younger workers.

Businesses that hire qualified workers during the first few months of this year have until Aug. 17, 2009 to request the certification required. You should use revised Form 8850 to request certification from your respective state workforce agency. In Texas that is the Texas Workforce Commission. The American Recovery and Reinvestment Act added unemployed veterans returning to civilian life and “disconnected youth” to the list of groups covered by the work opportunity tax credit. Certification by the state workforce agency is required, regardless weither the new employee qualifies.

The credit still applies for businesses that hire workers belonging to any of 12 targeted groups, including people ages 18 to 39 living in designated communities, Hurricane Katrina employees, recipients of various types of public assistance, and qualified veterans, youth workers and ex-felons.

Even if you did not file within the required 28 days of hire, businesses have until Aug. 17, 2009, to file 8850 for unemployed veterans and disconnected youth who begin work on or after Jan. 1, 2009, and before July 17, 2009. IRS NOTICE