The Work Opportunity Tax Credit (WOTC) is set to expire on December 31, 2020, unless reauthorized by federal legislation. The U.S. Department of Labor Employment and Training Administration (ETA) has no indication whether Congress will pass legislation reauthorizing the tax credit for wages paid or incurred after December 31, 2020.
Effective January 1, 2021, WOTC will be in hiatus if not reauthorized.
All state workforce agencies will continue to accept applications after December 31, 2020. All WOTC applications received before December 31st, 2020 will continue to be screened and certified. Requests received will remain on hold until WOTC is reauthorized.
All WOTC target groups will be placed in hiatus status effective January 1, 2021, and will remain in hiatus until the tax credit is reauthorized.
WOTC going on hiatus is nothing new, it has happened 13 times over 20 years. CMS says “business as usual” when it comes to screening and processing WOTC applications. We do not stop screening when there is a hiatus. You must keep screening new hires for WOTC eligibility within 28 days of their start date, or you may miss out on potential tax credits when WOTC is reauthorized by congress.
At CMS we will continue to watch closely for any news of reauthorization, and will keep you informed as it happens.
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