TEGL03-09a2.pdf

ETA Advisory File Text

Part III - Administrative Procedural and Miscellaneous Section 51 - Work Opportunity Tax Credit Notice 2009-69 PURPOSE This Notice clarifies Notice 2009-28 2009-24 I.R.B. 1082 published on June 15 2009. As explained in Notice 2009-28 51 of the Internal Revenue Code the Code provides for a Work Opportunity Tax Credit WOTC for employers who hire individuals who are members of targeted groups. Section 1221 of the American Recovery and Reinvestment Tax Act of 2009 ARRTA enacted February 17 2009 Div. B Tit. I of Pub. L. No. 111-5 amended 51 to add two new targeted groups for purposes of the WOTC. New 51 d 14 provides that unemployed veterans and disconnected youth who begin work for an employer during 2009 or 2010 shall be treated as members of a targeted group for purposes of the WOTC. Notice 2009-28 sets forth the statutory definitions of unemployed veteran and disconnected youth and provides guidance on the definition of disconnected youth. With respect to disconnected youth Notice 2009-28 is being revised to clarify 51 d 14 B ii IV the definition of not readily employable by reason of lacking a sufficient number of basic skills. Section D of Notice 2009-28 is therefore revised to read as follows For purposes of 51 d 14 B ii IV an individual is not readily employable by reason of lacking a sufficient number of basic skills if the individual states in writing that he or she does not have a certificate of graduation from a secondary school or a GED Certificate. For purposes of 51 d 14 B ii IV an individual also is not readily employable by reason of lacking a sufficient number of basic skills if the individual states in writing that he or she has a certificate of graduation from a secondary school or a GED Certificate that was awarded no less than 6 months preceding his or her hiring date and has not held a job other than occasionally or been admitted to a technical school or post-secondary school since receiving the certificate. This clarifies that an individual who received a high school diploma or GED certificate at least six months prior to the hiring date and who otherwise satisfies the requirements for a disconnected youth will not fail to qualify as a disconnected youth merely because the individual has been employed at times since graduation as long as that employment was no more than occasional. TRANSITION RELIEF Section 51 d 13 provides that an individual shall not be treated as a member of a targeted group unless the employer obtains certification from a designated local agency on or before the day the individual begins work that the individual is a member of a targeted group or completes a pre-screening notice IRS Form 8850 on or before the day the individual is offered employment and submits such notice to the designated local agency to request certification not later than 28 days after the individual begins work. Notice 2009-28 provides that any employer who hires an unemployed veteran or a disconnected youth as defined in 51 d 14 after December 31 2008 and before July 17 2009 will be considered to satisfy the deadline in 51 d 13 A ii II if the employer submits the pre-screening notice to the designated local agency to request certification not later than August 17 2009. This notice extends the transition relief in Notice 2009-28. Specifically under this notice any employer who hires an unemployed veteran or disconnected youth as defined in 51 d 14 after December 31 2008 and before September 17 2009 will be considered to satisfy the deadline in 51 d 13 A ii II if the employer submits the pre-screening notice to the designated local agency to request certification not later than October 17 2009. EFFECT ON OTHER DOCUMENTS Notice 2009-28 2009-24 I.R.B. 1082 is clarified. DRAFTING INFORMATION The principal author of this notice is Robin Ehrenberg of the Office of Division Counsel Associate Chief Counsel Tax Exempt and Government Entities . However other individuals participated in its development. For further information regarding this notice contact Ms. Ehrenberg at 202 622-6080 not a toll-free call .