How Does an Employer Apply for WOTC?
At CMS, as Work Opportunity Tax Credit (WOTC) experts and service providers since 1997, we receive a lot of questions via our website. In the case of the above question, the sender did not provide their email address, so we were unable to reply directly to them. This is one of the more common questions (FAQ), so we thought we would share, and hopefully will help others too.
CMS Says: Whether you do this yourself, or use a service provider like CMS, the WOTC process starts with having new employees complete the following forms:
- IRS Form 8850 Pre-Screening Notice and Certification Request for the Work Opportunity Credit
- ETA Form 9061 Individual Characteristics Form (ICF) Work Opportunity Tax Credit
When the forms are completed they must be submitted to the State Workforce Agency (SWA) within 28 days of the new employee’s start date.
The State Workforce Agency determines eligibility and will issue a certification, a denial, or a request for additional information.
Once a certification has been received, you can track the employee’s hours and wages to determine the maximum certification. Employees must work a minimum of 120 hours to be eligible for the WOTC Credit.
To obtain your credits, use the IRS form 5884. Employers file this form to claim the work opportunity credit for qualified first- and/or second-year wages they paid to or incurred for targeted group employees during the tax year.
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