IRS Provides Relief for Certain Employers Claiming the Work Opportunity Tax Credit

Teresa Danielson

On August 10, the IRS issued Notice 2021-43. The notice provides the relief of the 28-day filing requirement of the IRS Form 8850 to employers who hire individuals eligible for the Designated Community Resident or a Qualified Summer Youth Employee under the Work Opportunity Tax Credit (WOTC) and whose principal place of residence is within an Empowerment Zone. Qualified hires must have begun work on or after January 1, 2021 or must begin work before October 9, 2021. The transition relief provided allows employers to submit IRS Form 8850 for these employees no later than November 8, 2021.

The Treasury Department and the IRS are aware that some employers that hired individuals who are Designated Community Residents or Qualified Summer Youth Employees may have submitted Form 8850 to the Designated Local Agency (DLA) within 28 days of the individual beginning work, regardless of the expiration of the Empowerment Zone designations. An employer that submitted IRS Form 8850 to the DLA and has received a denial letter due to the expiration of the Empowerment Zone designations must re-submit the completed Form 8850 by November 8, 2021. If an employer submitted Form 8850 to the DLA and was not issued a denial letter by the DLA, an employer does not need to re-submit Form 8850 to be eligible for the relief provided in this notice.


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