Reminder: The deadline for use of IRS Form 2848 is coming very soon – May 31, 2024.
You may be asking, “What is Form 2848?”, exclaiming “Oh no! What do I do now?”, or even wondering “What is WOTC, again?” Luckily, we have answers below for all three below.
On June 23, 2023, The Department of Labor (DOL) issued new guidance requiring Work Opportunity Tax Credit (WOTC) customers to implement and execute a new ETA Form 9198 - Employer Representative Declaration Form. This new form is replacing the existing IRS Form 2848 - Power of Attorney (POA) Form. It is to be used by employers to designate a third-party representative to act on their behalf to help employers manage WOTC certification requests with State Workforce Agencies (SWAs). Both employers and their representatives must sign this form. After signed and submitted, it will be valid for a length of up to 5 years and is specific to WOTC.
Effective May 31, 2024, use of IRS Form 2848 will be discontinued for this purpose, and employers MUST use ETA Form 9198 to declare any new representatives with the appropriate SWA. To better ensure a smooth transition and help reduce possible delays to WOTC determinations, it is important for employers to work with their WOTC providers to complete and file this new Form 9198 as soon as possible.
WOTC is a government incentive program used to encourage employers to hire and retain employees from certain targeted demographic groups that typically have challenges gaining employment. In return the employer gets a credit that could be worth up to $9,600 for each qualified individual on their tax return.
Employers must request and receive a certification from the SWA verifying the new hire is a member of a targeted group before they can claim the tax credit. After receiving the required certification from the SWA, the employer may apply the Work Opportunity Credit towards their taxes.
Aimed at helping people find jobs and encouraging employers to give them a chance, employers who screen for WOTC claim about $1 billion in tax credits each year, according to the Department of Labor (DOL).
If you do not currently have a WOTC screening program or hope to increase your screening percentage, contact us to connect with our subject matter experts. You can also check out a few best practices in How to Get Up to 100% WOTC Screening and Why for a deeper dive on the subject.
The information provided is intended as general guidance and is not intended to convey any tax, benefits, or legal advice. For information pertaining to your company and its specific facts and needs, please consult your own tax advisor or legal counsel. Links to sources may be to third party sites. We have no control over and assume no responsibility for the content, privacy policies or practices of any third party sites or services.