Loading...

Important Changes to WOTC Representation Requirements: ETA Form 9198

Published: May 9, 2024 by Sarah Perdue

employees discuss automated I-9 management

On June 23, 2023, the U.S. Department of Labor (DOL) published guidance updating forms used in the administration of the Work Opportunity Tax Credit (WOTC) and introduced a new form, ETA Form 9198, Employer Representative Declaration Form. 

ETA Form 9198

Form 9198 replaces IRS Form 2848, Power of Attorney and Declaration of Representative (POA). The POA is used by a business partnering with a provider of WOTC services like Experian Employer Services, allowing Experian to coordinate with State Workforce Agencies for WOTC purposes on an employer’s behalf.

WOTC is a federal tax credit program encouraging businesses to hire people from certain disadvantaged groups by offering an income tax credit to businesses who employ individuals who meet the criteria. By working with an experienced provider like Experian Employer Services, employers can take advantage of our streamlined WOTC form to determine eligibility with each new hire without affecting the candidate experience.

Deadline and New Action Required for Form 9198

This change by the DOL will require action by an employer’s WOTC partner. All IRS Form 2848 authorizations will automatically terminate on June 1, 2024, even if the form is scheduled to expire extending beyond that date. To ensure uninterrupted WOTC services, the Experian Employer Services WOTC team is working closely with each state agency to understand when the state(s) will be prepared to accept the new Form 9198.

Employers should be prepared to comply with this new requirement as of June 1 to ensure they are maximizing their WOTC potential. Experian Employer Services will assist with the completion and submission of new ETA Forms 9198, and coordinate with state workforce agencies to submit executed forms and continue monitoring to ensure acceptance. If you’re not already utilizing Experian’s WOTC services, you can learn more about the tax credit, how it can benefit your organization, or how this change may affect your business by visiting our website

Related Posts

Learn everything you need to know about the Work Opportunity Tax Credit (WOTC): benefits, eligibility, and application process for businesses.

Published: November 6, 2024 by Tim Cate

Who qualifies for WOTC? Discover the comprehensive eligibility criteria and claim your benefits today. Learn how to maximize work opportunity tax credit claims.

Published: May 16, 2024 by Sarah Perdue

Representatives Lloyd Smucker (R-PA) and Terri Sewell (D-AL), together with several other lawmakers, have introduced the “Improve and Enhance the Work Opportunity Tax Credit Act.” According to Congressman Smucker’s press release, “The Improve and Enhance the Work Opportunity Tax Credit Act of 2023 would update the WOTC, which has not been changed since its enactment twenty-seven years ago, and encourage longer-service employment. The bill would (1) increase the current credit percentage from 40% to 50% of qualified wages and (2) add a second level of credit for employees who work 400 or more hours. In addition, the bill eliminates the arbitrary age cap at which SNAP recipients are eligible for WOTC. This change will provide an incentive to hire older workers and better align the credit with the work reforms adopted in the debt ceiling negotiations in 2023.” The text of the bill can be found here. The following are the specific changes the bill proposes: For certified employees who work at least 400 hours in their first year, increase the credit percentage from 40% to 50%. For certified employees who work more than 400 hours in their first year, increase the qualified wage caps as follows: For target groups with a cap of $6,000 in qualified wages, double the qualified wages to $12,000 for a total possible credit of $6,000 (compared to the current $2,400). Disabled veteran: The current credit is 40% of the first $12,000 (up to $4,800); the bill would increase that to 50% of the first $24,000 (up to $12,000). Long-term unemployed veteran: The current credit is 40% of the first $14,000 (up to $5,600); the bill would increase that to 50% of the first $28,000 (up to $14,000). Long-term unemployed disabled veteran: The current credit is 40% of the first $24,000 (up to $9,600); the bill would increase that to 50% of the first $48,000 (up to $24,000). The Summer Youth target group would remain at 40% and not go up to 50%. The age ceiling for the SNAP target group, currently at age 39, would be eliminated, allowing any new hire that otherwise meets the SNAP requirements to be certified. How and When Could This Happen? This bill represents the most significant proposal to enhance the value of WOTC in many years. However, to be considered, Congress needs to negotiate a tax bill. Tax bills are typically included with large legislative packages such as annual appropriation bills. Congress passed a continuing resolution in November to avoid a government shutdown and delay annual appropriations legislation until 2024. In this instance, Congress created two deadlines at which different parts of the government could shut down without new legislation: January 19 and February 2. According to the Washington Post, House Speaker Mike Johnson “pushed through the laddered approach — leaning on support from Democrats to pass the GOP-controlled chamber — while vowing not to take up another CR in January or February. He reiterated that pledge to House members in a letter last week. ‘It continues to be my intention that the House and Senate complete action on full-year bills ahead of the January 19 and February 2 deadlines provided for in the last continuing resolution,’ Johnson wrote. ‘I do not intend to have the House consider any further short-term extensions.’” Therefore, one opportunity for tax legislation will be in January in the context of government funding. Despite Speaker Johnson’s statements, that process could certainly be delayed further into 2024. Former House Ways and Means Chairman Dave Camp recently interviewed the current Ways and Means Chairman, Jason Smith, at a PwC event. According to Politico’s Weekly Tax newsletter, “[Chairman] Smith believes that a variety of potential vehicles could exist next year, according to Camp — which would mean avenues beyond government funding measures needed early in 2024.” However, even if Congress does take up tax legislation, it is unlikely that this WOTC bill will rise to the top of priority issues. Nevertheless, it introduces important policy considerations for the future of the program, which comes up for renewal at the end of 2025. Department of Labor to Study WOTC DOL has funded an independent contractor, Economic Systems, Inc., to perform an evaluation of the WOTC program. Among the questions the evaluation seeks to research are: What are the characteristics of jobs of WOTC-hires? What types of employers apply for WOTC? How is WOTC reflected in employer hiring and retention practices/policies? To what extent does pre-screening for WOTC eligibility affect employment outcomes? According to a public notice, surveys of various interest parties will be issued in the winter of 2024-2025. State WOTC Programs Several state legislatures have proposals to institute some kind of state WOTC program. Maryland successfully passed a state income tax credit match to WOTC effective in 2022. Here are some of the others we are watching: Georgia House Bill 372 Missouri Senate Bill 1207 New York Senate Bill S4833A & Assembly Bill A1991A North Carolina House Bill 853 Pennsylvania HM 41747 Pennsylvania HM 40254 On December 19, 2023, the city of Tacoma, Washington passed an ordinance creating a $1,000 local WOTC for employers that add a new position for an individual certified by the State Workforce Agency as a member of the vocational rehabilitation WOTC target group.

Published: December 20, 2023 by Anna Bankston

Follow Us!

Subscribe to our blog

Enter your name and email for the latest updates.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

About Us

The Experian Services Insights blog focuses on providing updates and solutions for HR teams, business owners, tax pros and compliance officers looking to navigate complex regulatory landscapes while optimizing their workforce management processes. Some important topics include payroll tax, unemployment, income & employment verification, compliance, and improving the overall employee experience.