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McBrayer Blogs

IRS Guidance on the Work Opportunity Tax Credit Extension for 2014

As part of the Tax Increase Prevention Act of 2014 ("the Act") that Congress passed at the end of last year, the Work Opportunity Tax Credit ("WOTC") was re-extended for the 2014 tax year. The WOTC provides a tax credit to employers that hire members of certain targeted groups. The WOTC requires that employers obtain certification from Designated Local Agencies ("DLAs") within 28 days of the hiring of the specified individual or prescreen the applicants. Because the WOTC was not actually in effect until the end of 2014, its provisions apply retroactively, and employers now need further time to receive the proper certifications necessary for the credit.

Fortunately, the IRS has issued guidance that should provide relief to employers that hired those targeted employees during 2014. Under Notice 2015-13, employers can satisfy the certification requirements as to their employees if they complete the necessary form (Form 8850) and request certification by the DLA no later than April 30, 2015. Employers will still need to actually receive the certification required to claim the credit, but this extended deadline for requesting certification should provide employers with ample time to file the necessary paperwork for WOTC certification.

Kentucky Passes Nonprofit Association Reform.

On March 20, 2015, Governor Beshear signed HB 440, enacting Kentucky's adoption of the Uniform Unincorporated Nonprofit Associations Act ("the Act"). The Act aims to provide clarity and guidance in the area where charitable individuals engage in nonprofit ventures but do not incorporate. These informal groups can be as simple as a group of friends organizing to raise funds for a friend in need or a local youth sports team. Prior to Kentucky's adoption of the Act, such associations possessed no legal status as an entity apart from the individual members of the group. Now, these entities will be subject to certain default rules governing areas such as management and control and will be able to hold or transfer an interest in real or personal property. If an association makes a filing with the Secretary of State, the members of the association then receive limited liability from obligations of the association and must make annual filings. The association must also file a certificate of assumed name.

The new laws also include other nonprofit entity provisions that allow, among other things, for nonprofits to take advantage of technological advances in furtherance of official acts. For example, the new law allows for board members of nonprofits to meet by electronic means and provisions that require written notice can be fulfilled through electronic transmissions. According to the Secretary of State's office, this new law will bring Kentucky in line with 15 other states that have already adopted the Act.

For more information on how your business can benefit from the Work Opportunity Tax Credit or how changes in Kentucky law will affect nonprofits, contact the attorneys of McBrayer PLLC.

This article is intended as a summary of state and federal law and does not constitute legal advice.

Required Disclosure under Circular 230:

Pursuant to the rules of professional conduct set forth in Circular 230, as promulgated by the United States Department of the Treasury, nothing contained in this communication was intended or written to be used by any taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer by the Internal Revenue Service, and it cannot be used by any taxpayer for such purpose. No one, without our express prior written permission, may use or refer to any tax advice in this communication in promoting, marketing, or recommending a partnership or other entity, investment plan or arrangement to any other party.

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