On August 10, 2021 the IRS issued Notice 2021-43, announcing it is providing transitional relief for employers that hired individuals that identify as a Designated Community Resident or Qualified Summer Youth Employee. This transition relief extends the twenty-eight day deadline for employers to submit a request to a Designated Local Agency to certify that an employee hired between January 1, 2021 and October 8, 2021 is a Designated Community Resident or Qualified Summer Youth Employee and has a principal place of resident within an Empowerment Zone.
Empowerment Zones are distressed areas that have been designated based on specific criteria and benefit from tax incentives, grants, and other forms of government assistance. The Empowerment Zone designations terminated on December 31, 2020, but the Taxpayer Certainty and Disaster Tax Relief Act of 2020, permitted the designations to be extended through 2025.
Employers must receive, on or before the day on which such individual begins work for the employer, a certification from a Designated Local Agency that such individual is a member of a targeted group or must request certification that the individual is a member of a targeted group by submitting Form 8850 (Pre-Screening Notification and Certification Request for the Work Opportunity Credit) to a Designated Local Agency within twenty-eight days of hiring that individual. The transition relief under this notice allows employers to submit Form 8850 for these employees who identify until November 8, 2021.
This notice also provides guidance to certain employers who submitted a Form 8850 to a Designated Local Agency for these employees during the period of transition relief and received a denial due to the termination of Empowerment Zone designations on December 31, 2020 or who received a certification before the Empowerment Zone designations were extended.
As always, if there are any questions please do not hesitate to contact us or visit our website at www.thomas-and-company.com.