Track nine requirements to claim the work opportunity credit, starting with Form 8850 completed on or before the day the job offer is made.
Key takeaways for how to claim the work opportunity tax credit for new hires
- Pre-screening timing: The Internal Revenue Service requires that a pre-screening notice, identified as Form 8850, be completed by both the job applicant and the employer on or before the day a job offer is made Internal Revenue Service.
- Work hour threshold: The Georgia Department of Labor states that an employee must work at least 120 hours in the first year of employment to meet the Minimum Employment Period requirement before the employer can file for the credit Georgia Department of Labor.
- TANF eligibility window: An individual qualifies as a TANF recipient if they received benefits for any 9 months during the 18-month period ending on the hiring date, according to the Georgia Department of Labor Georgia Department of Labor.
- Form selection: Taxable employers file Form 5884 to claim the credit, while tax-exempt employers file Form 5884-C, as specified by the Internal Revenue Service Internal Revenue Service.
- Record retention: The Internal Revenue Service advises keeping records that support the credit for 3 years from the date the income tax return claiming the credit is due or filed, whichever is later Internal Revenue Service.
How to claim the Work Opportunity Tax Credit for new hires
Small firm HR managers and recruiters handling onboarding paperwork can capture this credit by tracking nine specific requirements. The process begins with identifying if a new hire fits a targeted group before making an offer. This initial step determines whether you can proceed with the certification request for the Work Opportunity Tax Credit.
A filled reference table of agency rules and forms
The following table lists the nine specific requirements for the Work Opportunity Tax Credit, mapping each rule to the publisher that states it. Each row cites the exact form, deadline, or eligibility window defined by that source.
| Requirement | Publisher | Specific Rule or Form |
|---|---|---|
| 1. Pre-screening notice | Internal Revenue Service | Form 8850 must be completed by the applicant and employer on or before the day a job offer is made. |
| 2. Certification request | Internal Revenue Service | Form 8850 serves as a written request to the state workforce agency to certify an individual as a targeted group member. |
| 3. Veteran service proof | Georgia Department of Labor | Active duty for more than 180 days, or discharge for service-connected disability, and the applicant must not have a period of active duty, not including training, of more than 90 days that ended during the 60-day period ending on the hiring date. |
| 4. TANF benefit window | Georgia Department of Labor | Receiving Temporary Assistance to Needy Families for any 9 months during the 18-month period ending on the hiring date. |
| 5. SNAP benefit window | Georgia Department of Labor | Received SNAP benefits for at least a 3-month period during the 15-months ending on the hire date. |
| 6. SSI benefit window | Georgia Department of Labor | Receiving supplemental security income benefits for any month ending during the 60-day period ending on the hiring date. |
| 7. Minimum work hours | Georgia Department of Labor | Employee must work at least 120 hours in the first year of employment before the employer can file and qualify. |
| 8. Filing form choice | Internal Revenue Service | Taxable employers file Form 5884; tax-exempt employers file Form 5884-C to claim the credit after certification. |
| 9. Record retention | Internal Revenue Service | Keep copies of Forms 8850, transmittal letters, and certification letters as long as needed for administration of the credit provisions. |
The Internal Revenue Service defines the pre-screening requirement, stating that to satisfy the requirement to pre-screen a job applicant, on or before the day that a job offer is made, a pre-screening notice (Form 8850, Pre-Screening Notice and Certification Request for the Work Opportunity Credit) must be completed by the job applicant and the employer, according to Internal Revenue Service. The same agency explains that employers use Form 8850 to pre-screen and to make a written request to the state workforce agency (SWA) of the state in which their business is located (where the employee works) to certify an individual as a member of a targeted group for purposes of qualifying for the work opportunity credit, according to Internal Revenue Service.
Step 1: Pre-screening and the Form 8850 deadline
To satisfy the requirement to pre-screen a job applicant, on or before the day that a job offer is made, a pre-screening notice (Form 8850, Pre-Screening Notice and Certification Request for the Work Opportunity Credit) must be completed by the job applicant and the employer, according to Internal Revenue Service. This timing rule means the paperwork cannot wait until after the start date; the specific deadline is the day the offer is extended. The form serves a dual purpose in the hiring process. Employers use Form 8850 to pre-screen and to make a written request to the state workforce agency (SWA) of the state in which their business is located (where the employee works) to certify an individual as a member of a targeted group for purposes of qualifying for the work opportunity credit, according to Internal Revenue Service.
The pre-screening notice is the first of the nine tracking requirements for your onboarding file. It establishes the initial contact with the state workforce agency and begins the certification clock. Because the form must be completed by both the job applicant and the employer, you need a process to collect the applicant’s portion before or during the offer conversation. See a hiring decision debrief for the offer note. The IRS identifies the state workforce agency of the state where the employee works as the recipient of this written request, so if your firm hires across state lines, you must identify the correct SWA based on the work location, not just the headquarters location.
Step 2: Verifying targeted group eligibility windows
Before submitting certification requests, confirm the new hire falls within the Georgia Department of Labor windows quoted for TANF, Veteran/SNAP, SSI, and the veteran service test. The eligibility windows vary significantly depending on the benefit received or military service history.
TANF Benefit Window According to the Georgia Department of Labor, an individual qualifies as a Temporary Assistance for Needy Families (TANF) recipient if they are a member receiving TANF for any 9 months during the 18-month period ending on the hiring date Learn About Tax Credits and Incentives | Georgia Department of Labor. Verify the hire’s benefit history against this 18-month period ending on the hiring date to ensure the 9-month requirement is met.
SNAP Benefit Window The Georgia Department of Labor states that the Veteran/SNAP category applies when the person received SNAP benefits for at least a 3-month period during the 15-months ending on the hire date Learn About Tax Credits and Incentives | Georgia Department of Labor. Check the hire’s SNAP records to confirm the 3-month duration falls within the 15-month window ending on the hire date.
SSI Benefit Window For Supplemental Security Income (SSI) recipients, the Georgia Department of Labor specifies eligibility if the individual is receiving supplemental security income benefits for any month ending during the 60-day period ending on the hiring date Learn About Tax Credits and Incentives | Georgia Department of Labor. Review the hire’s SSI award letters to verify any benefit month ending during the 60-day period ending on the hiring date.
Veteran Service Definition The Georgia Department of Labor defines veteran eligibility with two specific conditions. First, the applicant must have served on active duty in the Armed Forces of the United States for a period of more than 180 days, or have discharged or released from active duty for a service connected disability. Second, the applicant must not have a period of active duty (not including training) of more than 90 days that ended during the 60-day period ending on the hiring date Learn About Tax Credits and Incentives | Georgia Department of Labor. Disqualify only active duty, not including training, of more than 90 days that ended during the 60-day period ending on the hiring date.
Verification Action Cross-reference the hire’s benefit or service dates against these specific windows. If the hire does not meet the timeframe for one category, check if they qualify under another targeted group before proceeding to certification.
Step 3: Submitting certification requests to the state
Submitting the certification request to your state workforce agency is where documentation deadlines begin to count. According to the Washington Employment Security Department, the agency cannot process your application if you do not submit the required documents within 90 days from the date you apply. This 90-day window applies to the general submission of required documents for the Work Opportunity Tax Credit application.
For veterans who require a copy of their DD214 form or other military records, the Washington Employment Security Department notes they can request these documents online through the National Archives and Records Administration website, or by mail with a Standard Form SF-180. If your new hire is a veteran who is disabled, the Washington Employment Security Department specifies that you must also submit their Veterans Affairs (VA) Disability Letter within 30 days of the application date. This 30-day requirement for the VA Disability Letter is distinct from the general 90-day document submission deadline.
Step 4: Filing the correct tax form for your entity
Once you have the certification, the filing path depends on your organization’s tax status. See withholding form guides for a related payroll form choice. The Internal Revenue Service specifies that after a certification from the designated local agency that the employee is a member of one of the 10 targeted groups, taxable employers file Form 5884 (Work Opportunity Credit) and tax-exempt employers file Form 5884-C (Work Opportunity Credit for Qualified Tax-Exempt Organizations Hiring Qualified Veterans) to claim the WOTC, according to Internal Revenue Service. This distinction is critical for small firms that may operate as non-profits or have subsidiaries with different tax statuses.
For tax-exempt organizations, the requirement is specific to the type of hire. The Internal Revenue Service notes that a tax-exempt organization that hires a qualified veteran must report the work opportunity credit on Form 5884-C, Work Opportunity Credit for Qualified Tax-Exempt Organizations Hiring Qualified Veterans, according to Internal Revenue Service. If your firm is tax-exempt and hires a member of a different targeted group, you must verify the applicable form instructions for that specific category, as the cited rule explicitly ties Form 5884-C to qualified veterans in this context.
Before you can file either form, the employee must meet the minimum employment period. The Georgia Department of Labor states that employers also must meet requirements for the Minimum Employment Period, which is the number of hours required to be worked by the employee – at least 120 hours in the first year of employment - before they can file and qualify for the tax credit, according to Georgia Department of Labor. Track these hours carefully in your payroll system. You cannot submit the tax form until the employee has completed this threshold of work hours.
While the filing form is federal, the certification process often involves state-level processing. The California Employment Development Department indicates that using eWOTC makes it faster to get your new application processed, according to California Employment Development Department. Although this fact references a specific state system, it highlights the benefit of electronic submission where available. Check your state’s designated local agency to see if they offer an electronic portal similar to eWOTC to expedite the certification step before you proceed to the federal tax forms.
Illustrative example of tracking a hire
Form 8850 is completed on or before the offer day. TANF is any 9 months during the 18-month period ending on the hiring date. Veteran/SNAP is at least 3 months during the 15-months ending on the hire date. SSI is any month ending during the 60-day period ending on the hiring date. Active duty exceeds 180 days, and excludes non-training duty of more than 90 days in that 60-day period. Hours hit 120 in the first year.
Today, open the new hire’s onboarding file and mark each of the nine requirements as met or still open, starting with Form 8850 and ending with the support copies.
FAQ: How to claim the work opportunity tax credit for new hires
When must the pre-screening notice be completed?
The pre-screening notice must be completed by the job applicant and the employer on or before the day that a job offer is made, according to Internal Revenue Service. This specific timing requirement applies to Form 8850, the Pre-Screening Notice and Certification Request for the Work Opportunity Credit.
How many hours must a new hire work to qualify for the credit?
Employees must work at least 120 hours in the first year of employment to meet the Minimum Employment Period requirement, according to Georgia Department of Labor. Employers must satisfy this hour threshold before they can file and qualify for the tax credit. Track these hours carefully during the new hire's first year to ensure eligibility.
How can a veteran request a DD214 or other military records?
Veterans who need a copy of their DD214 form or other military records can request them online through the National Archives and Records Administration website, according to Washington Employment Security Department. They can also request these records by mail using a Standard Form SF-180. Keep copies of these documents to support the certification request for the credit.
Which form do tax-exempt organizations use to claim the credit?
A tax-exempt organization that hires a qualified veteran must report the work opportunity credit on Form 5884-C, according to Internal Revenue Service. This form is titled Work Opportunity Credit for Qualified Tax-Exempt Organizations Hiring Qualified Veterans. Use this specific form rather than the standard business forms if your entity is tax-exempt.
How long must you keep the WOTC certification letters?
Records that support the credit usually must be kept for 3 years from the date any income tax return claiming the credit is due or filed, whichever is later, according to Internal Revenue Service. Store the certification letters and related documentation securely for this duration. Retain these records to support the credit claim if the IRS requests verification.