Notice 2016-22: Transition relief, work opportunity tax credit (WOTC)

IRS Notice 2016-22: Transition relief for WOTC

The IRS today released an advance version of Notice 2016-22 as guidance and also providing transition relief for employers claiming the work opportunity tax credit (WOTC) for certain employees.

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Read text of Notice 2016-22 [PDF 163 KB]


Provisions enacted in late 2015 as part of the “Protecting Americans from Tax Hikes Act of 2015” (the PATH Act): 

  • Extend the WOTC through December 31, 2019, for taxable employers that hire members of a targeted group and for qualified tax-exempt organizations that hire qualified veterans
  • Amend section 51(d)(1) to add “qualified long-term unemployment recipients” to the list of targeted groups, effective as of January 1, 2016

Transition relief

Notice 2016-22 provides additional time for employers to comply with the new provisions under the PATH Act—that is, the extended the WOTC retroactively for 2015 for members of targeted groups and the creation of a new targeted group “qualified long-term unemployment recipients.”

Accordingly, today’s notice provides employers with additional time to file IRS Form 8850, Pre-Screening Notice and Certification Request for the Work Opportunity Credit, with designated local agencies (that is, additional time for employers that hired or hire members of targeted groups between January 1, 2015, and May 31, 2016).

Employers that hired or hire members of a targeted group, including long-term unemployment recipients, who begin work for that employer on or after June 1, 2016, are not eligible for the transition relief described in this notice with respect to any such new hire.

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