Get the free Work Opportunity Tax Credit Form 5884-C - Payroll Data Services

Form 5884-C (Rev. January 2013) f5884c.pdf 1 of 4 http://www.irs.gov/pub/irs-pdf/f5884c.pdf 3/28/2013 11:54 AM Form 5884-C (Rev. January 2013) f5884c.pdf 2 of 4 http://www.irs.gov/pub/irs-pdf/f5884c.pdf

How to fill out work opportunity tax credit

How to Fill Out Work Opportunity Tax Credit:

1. Determine if you are eligible: To claim the Work Opportunity Tax Credit (WOTC), you must meet specific criteria. This credit is available to employers who hire individuals from target groups, such as the long-term unemployed, veterans, ex-felons, and recipients of certain government assistance programs. Make sure you understand which target groups qualify for the credit.
2. Obtain the necessary forms: Before you can fill out the WOTC, you need to obtain the appropriate paperwork. The main form you'll need is IRS Form 8850, also known as the Pre-Screening Notice and Certification Request for the Work Opportunity Credit. Additionally, you may need to complete one or more of the following forms depending on the target group your new hire belongs to: ETA Form 9061, ETA Form 9062, or ETA Form 9063.
3. Pre-screen potential employees: The WOTC requires employers to pre-screen employees to determine their eligibility for the credit. This step involves having each potential employee fill out Form 8850, Section 1, which collects important information about their target group status. The employer or designated representative must also complete Section 2 of Form 8850 within 28 calendar days after the individual starts work.
4. Submit the forms: Once you have completed Form 8850 and any additional forms required for specific target groups, submit them to the appropriate agencies. Depending on your state, these agencies may include your State Workforce Agency (SWA) or your designated local agency. Follow the instructions provided by these agencies to ensure your forms are properly submitted.
5. Keep supporting documentation: It is critical to maintain accurate records related to the WOTC. This includes keeping copies of all forms submitted, supporting documentation that verifies an individual's eligibility for the credit, and any correspondence with the applicable agencies. Having thorough records will make the process smoother in case of an audit or if you need to provide additional information for the credit.

Who Needs Work Opportunity Tax Credit:

1. Employers aiming to hire individuals from target groups: The Work Opportunity Tax Credit is specifically designed to encourage employers to hire individuals who face barriers in securing employment. These individuals may include the long-term unemployed, veterans, ex-felons, recipients of Temporary Assistance for Needy Families (TANF), Supplemental Nutrition Assistance Program (SNAP) recipients, and more. If your business is looking to hire from these target groups, the WOTC can provide financial incentives.
2. Employers who want to reduce their tax liability: The WOTC offers employers a way to reduce their federal tax liability by hiring individuals from target groups. The credit amount varies depending on the target group and the number of hours the employee works. By claiming this credit, employers can potentially lower their overall tax burden while providing opportunities to those who face difficulties in finding employment.
3. Businesses of various sizes and industries: The WOTC is available to businesses of all sizes and across various industries. Whether you run a small local business or a large corporation, you can potentially qualify for this credit if you hire individuals from eligible target groups. It is important to review the specific requirements and consult with a tax professional to determine if your business is eligible to claim the WOTC.

For pdfFiller’s FAQs

What is work opportunity tax credit?

Work Opportunity Tax Credit (WOTC) is a federal tax credit available to employers who hire individuals from certain targeted groups who have consistently faced significant barriers to employment.

Who is required to file work opportunity tax credit?

Employers who hire individuals from targeted groups such as veterans, ex-felons, and individuals receiving government assistance are required to file for Work Opportunity Tax Credit.

How to fill out work opportunity tax credit?

Employers can fill out and file the Work Opportunity Tax Credit by completing IRS Form 8850 and submitting it to their state workforce agency within 28 days after the eligible employee begins work.

What is the purpose of work opportunity tax credit?

The purpose of the Work Opportunity Tax Credit is to provide incentives for employers to hire individuals from targeted groups who face barriers to employment, ultimately helping these individuals find meaningful work.

What information must be reported on work opportunity tax credit?

Employers must report information such as the employee's name, social security number, start date of employment, and the targeted group to which the employee belongs.

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