The Work Opportunity Tax Credit, which had expired on December 31, 2011, was extended by the American Taxpayer Relief Act of 2012 for two years, retroactive to January 1, 2012. The credit provides employers a credit for hiring individuals who fall into certain targeted group (a list of which can be found in IRC Section 51), but employers must submit the initially-completed Form 8850 within 28 days of the employee hire date in order for the employee to be eligible.
The IRS has issued Notice 2013-14, which grants to an employer a window until April 29, 2013 to submit a completed Form 8850 to the designated local agency for employees hired between January 1, 2012 and March 31, 2013. Special rules apply to select qualified veterans categories, which were on different sunset schedules than the rest of the Section 51 targed group categories.
The net impact of the Notice is there is now no penalty for employees who ceased screening for the Work Opportunity Tax Credit at the beginning of 2012.