16 January 2017 Additional grace period allowed for WOTC certification requests In furtherance of implementing changes that were made to the Work Opportunity Tax Credit (WOTC) by the Protecting Americans from Tax Hikes Act of 2015 (PATH Act), the US Department of Labor (the Department) has issued guidance that provides employers with an additional grace period for submitting certification requests for all target groups using forms previously approved by the Office of Management and Budget (OMB). The guidance also clarifies the verification process that State Workforce Agencies (SWAs) must use when determining eligibility for the Qualified Long-Term Unemployment Recipient target group. (Training and Employment Guidance Letter (TEGL) 25-15, Change 1.) An additional 90-day grace period is granted beginning on January 11, 2017, so that employers may continue updating their technology to implement WOTC forms that were revised in 2016. During this 90-day grace period, employers may submit certification requests for all target groups, including the Qualified Long-Term Unemployment Recipient target group, using various filing methods (e.g., email, fax, scanned, mail) and using "previously (2012) OMB approved" Employment & Training Administration (ETA) forms and IRS Form 8850. Importantly, this 90-day grace period does not provide transition relief under Section 51(d)(13)(A)(ii). Note that the grace period provided under TEGL 25-15 (June 17, 2016) did not permit employers to submit certification requests using "previously (2012) OMB approved" forms. It is reiterated that employers are required to submit a signed ETA Form 9175, Long-Term Unemployment Recipient Self-Attestation Form (SAF), with each certification request for the Qualified Long-Term Unemployment Recipient target group. Notwithstanding this requirement, during the 90-day grace period mentioned above, SWAs may process these certification requests without a signed SAF if they have access to unemployment insurance (UI) wage and UI claims records. If a SWA receives a certification request for this target group and cannot validate UI wage and UI claims records to determine eligibility and the request was submitted without a signed SAF, the SWA will send a "Needs Letter" to the employer requesting a signed SAF within 90 days of the receipt date of the letter. Note that TEGL 25-15 (June 17, 2016) gave employers only 30 days to submit a signed SAF following receipt of a "Needs Letter." The guidance provides SWAs with instructions for validating certification requests for the Qualified Long-Term Unemployment Recipient target group: "SWAs must verify that the individual has had zero UI wages for the two most recent completed quarters prior to the date the job applicant signed the IRS Form 8850." Note that TEGL 25-15 (June 17, 2016) did not contain these instructions. Where UI wage and/or UI claims records are not available, the SWAs may use a signed SAF to make final determinations (certifications and denials). On August 4, 2016, the Department requested public comment on all WOTC ETA forms. Ernst & Young LLP submitted comments to the DOL recommending changes to the SAF. Based on several of these comments, the Department submitted a request to the OMB to revise the SAF as well as ETA Form 9061, Individual Characteristics Form. We anticipate the Department will publish a revised SAF and ETA Form 9061 after OMB review and approval. For a preview of the new SAF and Individual Characteristics Form, go here and click View Information Collection (IC) List. To view the Department's statement to OMB and Ernst & Young LLP's comments, go here. We will update you with any further WOTC guidance. Additionally, we are monitoring tax reform proposals that may impact WOTC and will keep you apprised of potential changes.
Document ID: 2017-0094 | |||||||||||
