What Does Form 8850 Mean for Employers?

Form 8850, “Pre-Screening Notice and Certification Request for the Work Opportunity Credit,” is an Internal Revenue Service (IRS) document used by employers. Its purpose is to pre-screen new employees to determine if they belong to a specific group of job seekers, which could make the employer eligible for the Work Opportunity Tax Credit (WOTC). Filing the form with the appropriate state agency begins the process of certifying a new hire as a member of a targeted group.

Information Required for Form 8850

An employer can download the most current version of Form 8850 directly from the IRS website. Before the form can be completed, specific pieces of information must be gathered from both the employer and the job applicant. The employer must provide their business name, Employer Identification Number (EIN), address, and telephone number. The form also requires the applicant’s name, Social Security number, address, and date of birth.

The core of Form 8850 consists of questions to identify if the applicant is a member of a WOTC-targeted group. These questions ask the applicant to confirm their status, such as if they are a:

• Qualified IV-A Recipient, an individual receiving assistance under a program like Temporary Assistance for Needy Families (TANF).
• Qualified Veteran, which includes categories for veterans who are unemployed, disabled, or receiving certain food assistance benefits.
• Designated Community Resident, an individual aged 18 to 39 residing within a federally designated Empowerment Zone or Rural Renewal County.
• Person referred from a vocational rehabilitation program.
• Recipient of Supplemental Security Income (SSI).
• Qualified Long-Term Unemployment Recipient who has been jobless for 27 consecutive weeks or more.

Completing and Submitting the Form

The process of completing Form 8850 involves both the job applicant and the employer. The applicant is responsible for completing and signing the first page of the form on or before the day a formal job offer is made. After the applicant has completed their section, the employer fills out the remainder of the form. It is important to note that Form 8850 is not sent to the IRS; instead, the employer must submit it to the designated State Workforce Agency (SWA) for the state where the employee will work.

The completed Form 8850 must be sent to the SWA no later than the 28th calendar day after the employee’s start date. To complete the certification request, employers must also submit either ETA Form 9061 (Individual Characteristics Form) or ETA Form 9062 (Conditional Certification). If the new hire is a Qualified Long-Term Unemployment Recipient, an additional self-attestation form may also be required. Employers can find the correct mailing address or online submission portal for the relevant SWA by visiting the Department of Labor’s website.

Post-Submission Process

After an employer submits the required forms to the State Workforce Agency, the agency begins its review process. The SWA evaluates the information provided to determine if the new employee is a member of one of the WOTC targeted groups. The SWA will then notify the employer of its determination, sending either a formal certification for an eligible employee or a denial notice.

With the official certification in hand, the employer can calculate and claim the Work Opportunity Tax Credit on their annual business income tax return. This is typically done by filing Form 5884, Work Opportunity Credit, along with their other tax documents. Employers should retain copies of all submitted forms and the final certification letter for their records.