The Work Opportunity Tax Credit, provides businesses credits for hiring individuals; who are members of twelve targeted groups.
This business tax credit guidelines are rather complex, and time sensitive. The rules are so complex, time consuming, and document dependent; I contend many businesses will not spend the time to apply. Also, I question how many individuals in these targeted groups will find jobs based upon the tax credit.
IRS estimates that it will take more than four hours to learn, and complete Form 8850, But the IRS did not include the additional time gather other forms and the communications necessary to get the credit.
I am provided a few brief examples of the complexity and encourage businesses to rely upon the following links for complete details, http://www.irs.gov/pub/irs-pdf/i8850.pdf and http://www.irs.gov/pub/irs-pdf/f8850.pdf.
The IRS Form 8850 is not the only form that is needed. The Employers must complete and send to the Texas Workforce Commission either
a. Department of Labor Employment and Training (ETA) Form 9062, Conditional Certification Form, if the job applicant received this form from a participating agency (e.g., the Jobs Corps),
b. ETA Form 9061, Individual Characteristics Form, if the job applicant did not receive a conditional certification,
c. The conditional certification form from Texas Workforce Commission.
The credits apply to qualified individuals whom are hired to work after January 1, 2009 and before July 11, 2009. A rather short time line.
In Texas the Texas Workforce Commission must certify each employee for the tax credit by August 17, 2009.
a. Must have served at least 180 days of active duty, OR
b. Discharged or released from active duty with a service connected disability.
c. Must have been discharged no longer than five years before being hired.
d. Must have received at least four weeks of unemployment benefits during the one-year ending with hiring.
e. Must start to work before 2011.
DISCONNECTED YOUTH requirements:
a. Must be age 16 but not age 25 on the hiring date, and
b. Has not regularly attended any secondary, technical, or post-secondary school during the 6-month period preceding the hiring date ( not more than 10 hours of schooling per week), and
c. Has not been regularly employed during the prior 6-month period(during the immediate last 3 months has not earned more than the minimum wage for 30 hours per week), and
d. Is not readily employable by reason of lacking a sufficient number of basic skills. Defined as individuals does did not graduate from high school and does not have a GED. Or has graduated from high school or gotten their GED less than six months before graduation.
- The other 10 targeted groups are:
a. An individual who is a member of a family receiving assistance under a state plan approved under part A of title IV of the Social Security Act relating to Temporary Assistance for Needy Families.
b. An ex-felon who has been convicted of a felony under any federal or state law,
c. Designated community resident. An individual who lives within an empowerment zone (San Antonio and El Paso are in an empowerment zone), renewal communities (Corpus Christi, Texas and El Paso County are renewal communities), rural renewal county (Refugio and Yoakum counties are rural renewal counties)
d. Summer youth employee.
e. Recipient of Food Stamps benefits.
f. Recipient of Social Security SSI benefits.
g. Long-term family assistance recipient, who has stopped receiving benefits.
h. Hurricane Katrina whose home was in in Gulf Opportunity Zone and employment will be in the Gulf Opportunity Zone (Texas is not in this zone).
The concept may have been good, but the complex rules will discourage many employers to devote the resources to qualify IMO.
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