IRS Releases WOTC Transition Guidance

WOTC Transition & Retroactive Screening Back to January 1st. 2015

The IRS has released Notice 2016-22 to provide transition relief for employers claiming Work Opportunity Tax Credits under Section 51 and 3331 (e) of the Internal Revenue Service code.

This new ruling will allow CMS and the employers we service to go back to 2015 to obtain WOTC tax credits they may have otherwise lost. As of 3/8/2016 we can go back to January 1st, 2015 to screen candidates.

This transition period is in effect through May 31, 2016, with all applications and paperwork for retroactive screening to be submitted to state agencies by June 29th, 2016.

Key components of the WOTC legislation:

  1. Additional time for employers to go through the transition period. We can go retroactively back to January 1st, 2015 and screen employees we may have missed.
    2. New category – Long Term Unemployed Recipient effective January 1st, 2016. (No retroactive screening in 2015 on this brand new category.)
    3. New IRS 8850, 9061 & 9062 will be released to capture the new Long Term Unemployed Recipient category.
    4. The “28 Day Rule” is on hold till May 31st, 2016, allowing us to back to January 1st, 2015.
    5. As of June 1st, 2016 the “28 Day Rule” goes back into effect.

CMS’s Brian Kelly tells us “This is great news for our customers. This provides us with an opportunity to look back and capture credits for employees that were previously considered too late, or employees that were missed last year.”

“This is also terrific news for new customers coming onboard now, since we can look back at the last 15 months for them to capture credits for their new hires.”

Contact CMS today to find out how we can help you make the most of the Work Opportunity Tax Credit. We’ve been helping companies maximize their tax credits since 1997. How much can we save you? Call 800-517-9099 or visit our website at


Related: IRS Notice 2016-22