 Internal Revenue Service IRS tax news help wanted businesses that are hiring should know about the work opportunity tax credit Oh, yeah IRS. Well, you should know about the government's stay out of my hiring practices rule that I've put in place In any case first an attempt at a joke. It's my way or the highway my way or the highway Fortunately my way generally is the highway anybody wants to walk do it now So I guess we can actually go my way and the highway. We've gotten tiredly too many troublemakers here Since really like they're the same way She's with them. Who's them them are the same as they that way everyone's happy Who is they? Hey is the walrus honestly, why wouldn't you go the highway, which is also my way? I mean, it's the fastest way. That's why they built it That's why I built this time machine. I give you the chrono trike Plus, I really don't know any other way. Avoid the blockade. It's the only way There's no time mainly because I'm completely dependent on my phone to tell me where to go Well, my intuition tells me So I guess my way is actually the phone's way, which is generally the highway and that's the way we're going dang it I'm sorry. I think it's coming down. It's coming down my foot. That's it mark. That's the way. We're going into story Coming down the cable stays the foot is broken IRS tax tip 20 22-137 September 7 2022 Businesses hanging up their help wanted signs should be sure to check out the work opportunity tax credit This credit encourages employers to hire workers certified as members of any of 10 targeted groups Facing barriers to employment the credit has been extended through the end of 2025 so the 10 targeted groups are so in other words if you're hiring someone and you have them They categorize or they fit into one of the 10 groups You may get a benefit a credit related to it. So you might want to check it out So we got the temporary assistance for needy families recipients qualified unemployed veterans including disabled veterans formally incarcerated individuals designated community residents living in empowerment zones or rural renewal counties vocational rehabilitation referrals some are youth employees living in Empowerment zones supplemental to nutrition assistance program recipients supplemental security income recipients long-term family assistance recipients long-term unemployment recipients certification requirement to claim the credit an employer must first get Certification that an individual is a member of the targeted group So if you're gonna get a credit for hiring someone in a particular group You got to be able to verify that they are in that particular group in some way some shape some form. They do so by submitting IRS form 8850 Prescreening notice and certification request for the work opportunity credit There's a link to that here to their state workforce agency within 28 days after the eligible worker begins work Employer should not submit this form to the IRS They should contact their state workforce agency with any questions about processing of form 8850 Figuring and claiming the credit so once you've got a hiring in place and and you've verified the person that's falling into One of the categories then of course the question is well How do I get the access to the actual credit? Eligible businesses claim the credit work opportunity credits on their federal income tax return It is generally based on wages paid to eligible workers during the first year of employment So as you file your tax return the income tax return after employer receives form 8850 Certification they figure the credit on form 5884 work opportunity credits You might want to check out that form and any related instructions possibly to help you understand the actual calculation of the credit in a bit More detail There's a link to that here and then claim the credit on form 3 8 0 0 business our general business credit There's a link to that form as well special rule for tax exempt organization a special a rule allows tax exempt Organizations to claim the credit only there's a bold and only here for hiring qualified veterans who begin work for the Organization between 2020 and 2026 after the employer receives the form 8850 certification These organizations claim the credit against payroll taxes on form 5884 C work opportunity credit for qualified tax exempt Organizations there's a link to that here credit limitations on the credits So for a taxable business the credit is limited to the business income tax liability So it's not what we would call like a refundable credit, right? It's going to be limited to your tax liability your tax liability can't go below You know in essence zero that I'm going to pay you for the business if you have a loss Then Then it's not might not benefit you past the point of the liability So any credit remaining above the income tax liability is subject to the normal carry back and carry forward rules So if you have like you might be able to look into the carry back and carry forward rules when you get into a loss Just like normal when you when you get into a loss to the question would be the iris doesn't want to actually pay you for losses They're only your partner when you have income, right? Because they want a piece of the income Then the question is what do you do if you have a loss? Can you get some benefit from it by by matching up against? Future earnings or earnings in the past and you could take a look at those rules for carry back and carry forward rules For a qualified tax exempt organization the credit is limited to the amount of employer social security tax It owes on wages paid to qualified employees So there's links to some of this information here if you want to check it out in more detail There'll be a link to this in the description