IRS Form 8850 Instructions

If you’re a member of a targeted group for Work Opportunity Tax Credit purposes, and you’re applying for a new job, you may be asked to complete IRS Form 8850, Pre-Screening Notice and Certification Request for the Work Opportunity Credit.

In this article, we’ll walk through everything you should know about this tax form, including:

• Step by step guidance on completing IRS Form 8850
• Key definitions, such as targeted groups
• Additional information about the work opportunity tax credit

Let’s begin by going over IRS Form 8850.

How do I complete IRS Form 8850?

This two-page tax form contains two parts:

• Job applicant information
• Employer information

Let’s go through each part, one step at a time.

Job applicant information

If you’re applying for employment, then your prospective employer may ask you to complete IRS Form 8850, especially if the employer believes that you’re part of a targeted group.

Targeted groups

The Internal Revenue Service (IRS) describes specific groups, known as targeted groups, as people who face barriers to employment. Through the work opportunity tax credit program, the IRS provides eligible employers a federal tax credit to hire a new employee who is considered part of a targeted group.

According to the IRS, targeted groups include the following:

1. Qualified IV-A recipients
2. Qualified veterans
3. Qualified ex-felons
4. Designated community residents
5. Vocational rehabilitation referrals
6. Summer youth employees
7. SNAP benefit recipients (food stamps)
8. Long-term family assistance recipients
9. Qualified long-term unemployment recipients

Detailed descriptions of each targeted group can be found later in the article.

Let’s proceed to the instructions. Fortunately, most of this is self-explanatory, but we’ll go step by step.

Applicant name

Enter your name as it appears on your driver’s license, or other identity documents.

Social Security number

Enter your Social Security number here.

Street address

In the lines provided, enter your street address, including:

• City
• State
• ZIP code

County

Enter the county where you reside.

Telephone number

Enter your nine-digit phone number here.

Date of birth

If you are under the age of 40, enter your birth date in month, day, year order.

Box 1

Check Box 1 if you received a conditional certification from either:

• Your state workforce agency (SWA), or
• A participating local agency

Box 2

If any of these statements apply, check Box 2:

• You are a family member of a family that has received Temporary Assistance for Needy Families (TANF) for 9 of the past 18 months
• You are a veteran and a member of a family that has received Supplemental Nutrition Assistance Program (SNAP) benefits (food stamps) for 3 of the past 18 months
• A rehabilitation agency referred you to this eligible employer. This can be:
  • An appropriate state workforce agency
  • Employment network under the Ticket to Work program, or
  • The Department of Veterans Affairs
• You are at least 18 years of age, but not yet 40, and you are a family member that
  • Received SNAP benefits for the past 6 consecutive months, or
  • Received SNAP benefits for at least 3 out of the past 5 months, but are no longer eligible
• You have been convicted of a felony or released from prison for a felony within the past year
• You received Supplemental Security Income (SSI) benefits for any month ending in the past 60 days, or
• You are a veteran, and you were unemployed for one or more periods totaling:
  • At least 4 weeks
  • But less than 6 months over the previous year

Box 3

Check Box 3 if you are a veteran and you were unemployed for one or more periods totaling at least 6 months during the past year.

Box 4

Check this box if you are a veteran who:

• Is entitled to compensation for a service-connected disability, and
• Were discharged or released from active duty in the United States Armed Forces within the past year

Box 5

Check this box if you are a veteran who:

• Is entitled to compensation for a service-connected disability, and
• Were unemployed for one or more periods totaling at least 6 months in the past year

Box 6

Check Box 6 if you are a member of any family that:

• Received TANF payments for at least the past 18 months, or
• Received TANF payments for any 18 months beginning after August 5, 1997, and the earliest 18-month period beginning after August 5, 1997, ended during the past 2 years; or
• Stopped being eligible for TANF payments during the past 2 years because federal or state law limited the maximum time those payments could be made.

Box 7

Check this box if you have been unemployed for at least 27 consecutive weeks and received unemployment compensation for some or all of that time.

Signature

Sign and date the bottom of this form.

Employer information

Page 2 of IRS Form 8850 contains employer information. Most of this information is also straightforward, but we’ll go through this, step by step, as well.

Employer’s name

Enter the employer’s name here.

Telephone number

Enter the telephone number for the employer in this space.

Employer identification number (EIN)

Enter the employer identification number, or EIN, in this field.

Street address

Enter the employer’s address in this field.

Contact person

Enter the name of a point of contact for the employer. If the contact information (telephone number and address) are different from the employer’s contact information, then complete the associated fields.

Group number

If the applicant is either a designated community resident or summer youth employee, then enter one of the following group numbers:

• Designated community resident: Group 4
• Summer youth employee: Group 6

Date applicant

There are several fields here, where each date might be a different one:

• Date the applicant gave information (i.e. completed Form 8850)
• Date you made a job offer to the eligible employee
• Date you actually hired the employee
• New hire’s start date

Employer’s signature

At the bottom of page 2, the employer, or one of the employer representatives will sign and date the completed form. Be sure to enter the person’s title in the provided field.

Filing considerations

Below are some filing considerations regarding IRS Form 8850.

Where do WOTC applications go?

According to the IRS form instructions, employers should never attach Form 8850 to a tax return or otherwise send it to the IRS, regardless of the employee’s targeted group. Instead, Form 8850 must be submitted to the SWA of the state in which your business is located (where the employee works).

Qualified target groups

Below is additional information about the qualified target groups, for work opportunity credit purposes.

Qualified IV-A recipients

This group includes any individual who is a member of a family receiving assistance under a state plan approved under part A of Title IV of the Social Security Act relating to Temporary Assistance for Needy Families (TANF).

The assistance must be received for any 9 months during the 18-month period ending on the hiring date.

Qualified veterans

A veteran who is any of the following:

• A member of a family that has received Supplemental Nutrition Assistance Program (SNAP) benefits (food stamps) for at least a 3-month period during the 15-month period ending on the hiring date.
• Unemployed for a period or periods totaling at least 4 weeks (whether or not consecutive) but less than 6 months in the 1-year period ending on the hiring date.
• Unemployed for a period or periods totaling at least 6 months (whether or not consecutive) in the 1-year period ending on the hiring date.
• Entitled to compensation for a service-connected disability and is hired within 1 year after being discharged or released from active duty in the U.S. Armed Forces.
• Entitled to compensation for a service-connected disability and was unemployed for a period or periods totaling at least 6 months (whether or not consecutive) in the 1-year period ending on the hiring date.

Requesting this information is an exception to the Americans with Disabilities Act’s prohibition on pre-offer disability-related inquiries. This request’s purpose is to support the hiring of certain disabled veterans, which may entitle the employer the employer to a higher maximum credit than other targeted work members.

To be considered a veteran, the applicant must:

• Have served on active duty (not including training) in the Armed Forces of the United States for more than 180 days or have been discharged or released from active duty for a service-connected disability, and
• 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.

Qualified ex-felons

A qualified ex-felon is an ex-felon who has been convicted of a felony under any federal or state statute, and is hired not more than 1 year after the conviction or release from prison for that felony.

Designated community residents

A designated community resident is an individual who is at least age 18, but not yet age 40 on the hiring date and lives within an empowerment zone or rural renewal county.

Vocational rehabilitation referrals

A vocational rehabilitation referral is an individual who:

• Has a physical or mental disability resulting in a substantial handicap to employment, and
• Was referred to the employer upon completion of (or while receiving) rehabilitation services by a rehabilitation agency approved by one of the following:
  • State workforce agency
  • An employment network under the Ticket to Work program, or
  • The Department of Veterans Affairs

Summer youth employees

A summer youth employee is an individual who:

• Performs services for the employer between May 1 and September 15;
• Is at least age 16 but not yet age 18 on the hiring date (or, if later, on May 1);
• Has never worked for the employer before; and
• Lives within an empowerment zone.

SNAP benefit recipients (food stamps)

This is an individual who:

• Is at least age 18 but not yet age 40 on the hiring date, and
• Is a member of a family that:
  • Has received SNAP benefits for the 6-month period ending on the hiring date; or
  • Is no longer eligible for such assistance, but the family received SNAP benefits for at least 3 months of the 5-month period ending on the hiring date.

Long-term family assistance recipients

This includes any individual who is receiving supplemental security income benefits under Title XVI of the
Social Security Act for any month ending during the 60-day period ending on the hiring date.

Qualified long-term unemployment recipients

A qualified long-term unemployment recipient is an individual who on the day before the individual begins work for the employer, or, if earlier, the day the individual completes Form 8850 as a pre-screening notice, is in a period of unemployment that:

• Is not less than 27 consecutive weeks, and
• Includes a period in which the individual received unemployment compensation under state or federal law.
  • This period may be less than 27 weeks

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Frequently asked questions

Where can I find IRS Form 8850?

You can find IRS Form 8850 on the IRS website. For your convenience, we’ve included the current form here, in our article.

Related tax forms

This tax form is one of the fillable tax forms provided by the Internal Revenue Service, to help taxpayers reduce their tax preparation costs. To see more forms like this, visit our free fillable tax forms page, where you’ll also find articles like this.

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