IRS Issues WOTC Transition Relief for Summer Youth and Designated Community Resident Target Groups

The IRS issued new guidance on December 11th for the Work Opportunity Tax Credit (WOTC) Transition Relief under Internal Revenue Code § 51. The Notice 2020-78 (PDF), provides transition relief by extending the 28-day deadline for employers to request certification from a designated local agency (DLA) that an individual hired on or after January 1, 2018, and before January 1, 2021, is a member of the designated community resident targeted group or the qualified summer youth employee targeted group.

An employer that hired an individual who is a designated community resident, or a qualified summer youth employee, and who began work for that employer on or after January 1, 2018, and before
January 1, 2021, will be considered to have satisfied the requirements of § 51(d)(13)(A)(ii), whether or not the employer submitted the completed Form 8850 to the DLA within 28 days of the individual beginning work for the employer, if the employer submits the completed Form 8850 to the DLA to request certification no later than January 28, 2021.

In the event that an employer submitted Form 8850 to the DLA and was not issued a denial notification by the DLA, the employer does not need to resubmit Form 8850.

 

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