Page 23 - Small BusinessTax Credits

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Instructions for Form 8850 Pt. size: 9.5 14:15 - 17-Mar-2021
Department of the Treasury
Internal Revenue Service
(Rev. March 2021)
(For use with the March 2016 revision of Form 8850, Pre-Screening Notice and
Certification Request for the Work Opportunity Credit)
General Instructions member of a targeted group (as defined later, under
Members of Targeted Groups), the employer completes the
rest of the form no later than the day the job offer is made.
Section references are to the Internal Revenue Code unless Both the job applicant and the employer must sign Form
otherwise noted. 8850 no later than the date for submitting the form to the
Future Developments SWA.
For the latest information about developments related to Instructions for Employer
Form 8850 and its instructions, such as legislation enacted
after they were published, go to IRS.gov/Form8850. When and Where To File
What's New Don’t file Form 8850 with the IRS. Instead, you must submit it
The Taxpayer Certainty and Disaster Tax Relief Act of 2020 to the SWA of the state in which your business is located
made the following changes. (where the employee works) generally no later than the 28th
• The work opportunity credit has been extended to cover calendar day after the date the individual begins working for
certain individuals who begin working for you after 2020 and you.
before 2026.
• The empowerment zone designations expired at the end Submitting Form 8850 to the SWA is listed in Rev.
of 2020. However, the Act provides for an extension of the TIP Proc. 2018-58 (section 15, item 12) as an act that
designations to the end of 2025. To extend the designations, may be postponed for taxpayers affected by a
state and local governments must amend their nominations federally declared disaster. For the latest disaster tax relief
guidance go to IRS.gov/Disaster.
of the designated zones in order to move the termination
date to December 31, 2025. The IRS is working to provide If the credit expires and is retroactively extended, the
guidance on how to amend the nomination of an IRS may allow you more time to submit Form 8850
empowerment zone to provide for a new termination date. Go TIP for an individual who began work while the credit was
to IRS.gov/Form8850 for updates on the guidance once it expired or for a reasonable time after it was extended. If more
becomes available. time is allowed, we will provide details at IRS.gov/Form8850
Purpose of Form and in revised Instructions for Form 8850.

Employers use Form 8850 to pre-screen and to make a Although facsimile submission of Form 8850 is permitted,
written request to the state workforce agency (SWA) of the not all states are equipped to accept a faxed copy of Form
state in which their business is located (where the employee 8850. Contact your state WOTC coordinator as discussed
works) to certify an individual as a member of a targeted below and see Notice 2012-13 for details. Notice 2012-13,
group for purposes of qualifying for the work opportunity 2012-9 I.R.B. 421, is available at IRS.gov/irb/
credit. 2012-09_IRB#NOT-2012-13.
Submitting Form 8850 to the SWA is but one step in the Although electronic submission of Form 8850 is permitted,
process of qualifying for the work opportunity credit. The not all states are equipped to receive Form 8850
state work opportunity tax credit (WOTC) coordinator for the electronically. Contact your state WOTC coordinator as
SWA must certify the job applicant is a member of a targeted discussed next and see Announcement 2002-44 and Notice
group. After starting work, the employee must meet the 2012-13 for details. You can find Announcement 2002-44 on
minimum number-of-hours-worked requirement for the work page 809 of Internal Revenue Bulletin 2002-17 at
opportunity credit. Generally, an employer elects to take the IRS.gov/pub/irs-irbs/irb02-17.pdf.
credit by filing Form 5884, Work Opportunity Credit.
However, a tax-exempt organization that hires a qualified To get the name, address, phone and fax numbers, and
veteran must report the work opportunity credit on Form email address of the WOTC coordinator for your state, visit
5884-C, Work Opportunity Credit for Qualified Tax-Exempt the Department of Labor Employment and Training
Organizations Hiring Qualified Veterans. Administration (ETA) website at www.dol.gov/agencies/eta/
You must receive the certification from the SWA wotc/contact/state-workforce-agencies.
! before you can claim the related credit on Form 5884 Never attach Form 8850 to a tax return or otherwise
CAUTION or Form 5884-C. ! send it to the IRS, regardless of the employee's
CAUTION targeted group. Form 8850 must be submitted to the
Who Should Complete and Sign the SWA of the state in which your business is located (where
Form the employee works).
The job applicant gives information to the employer on or
before the day a job offer is made. This information is entered
on Form 8850. If the employer believes the applicant is a

Feb 25, 2021 Cat. No. 24833J