IRS Issues Guidance on Work Opportunity Tax Credit

The IRS issued guidance expanding the definition of "targeted individuals" for whom employers may claim a Work Opportunity Tax Credit. Specifically, the IRS added qualified long-term unemployment recipients, effective Jan. 1, 2016. The IRS is also modifying the applicable forms employers use to claim a Work Opportunity Tax Credit.
 
The Work Opportunity Tax Credit provides a credit against federal income tax liabilities for employers who hire individuals from certain targeted groups, such as unemployed veterans, ex-felons, and recipients of certain government assistance programs, such as food stamps (now known as the Supplemental Nutrition Assistance Program). 
 
Late last year, Congress extended the Work Opportunity Tax Credit for five years, retroactive to Jan. 1, 2016.  That legislation included a provision adding the long-term unemployed individuals to the list of targeted groups that employers may receive a credit for hiring. The guidance released last week defines qualified long-term unemployment as any individual who is in a period of long-term unemployment that (i) is not less than 27 consecutive weeks, and (ii) includes a period (which may be less than 27 consecutive weeks) in which the individual received unemployment compensation under State or Federal law."
 
The guidance, which includes details on how employers can file claims for a Work Opportunity Tax Credit, is available here.
 
Please contact NATSO's legislative and regulatory counsel David Fialkov (dfialkov@natso.com) with any questions.
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David Fialkov

David Fialkov is the Vice President of Government Relations, as well as the Legislative and Regulatory Counsel, at NATSO. In this capacity, Mr. Fialkov direct's NATSO's legislative, regulatory, and legal strategy on a range of issues, including transportation, energy and fuels, labor, data security, and taxes. Mr. Fialkov also oversees NATSO's political engagement program, including individualized legal and political counsel to member companies. Prior to joining NATSO, Mr. Fialkov was the senior associate in the Government Affairs and Public Policy practice at the law firm of Steptoe and Johnson in Washington, D.C. At Steptoe, Mr. Fialkov advised clients on legislative, regulatory, and political issues, as well as legal concerns. His primary clients included trade associations representing the motor fuel wholesale and retail industries, including the National Association of Convenience Stores and the Society of Independent Gasoline Marketers of America. Mr. Fialkov's focus was not only on the motor fuels business, but also the litany of other issues that retailers confront, including labor matters, foodservice issues, healthcare and employment issues, tax matters and data security. Prior to joining Steptoe, Mr. Fialkov graduated with honors from George Washington University Law School. He received his B.S. Summa cum laude with highest honors from Clark University in Worcester, MA. He lives in Washington, D.C. with his wife Allison and daughter Lilah. More
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