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EEOC: Proper Use of IRS Form 8850 For WOTC Does Not Run Afoul of Anti-Discrimination Laws


At the end of April, the Equal Employment Opportunity Commission (“EEOC”) issued an opinion letter which confirmed its belief that the proper use of Internal Revenue Service Form 8850 (“Form 8850”) for the Federal Work Opportunity Tax Credit (“WOTC”) does not run afoul of anti-discrimination laws.

For those not familiar with the WOTC, it provides employers with a tax credit by encouraging them to “hire and train people who are experiencing severe difficulties that are often linked to unemployment.”  Those employment candidates that enable an employer to qualify for the WOTC include recipients of some state and federal aid programs (such as food stamps), those that have finished or are still working through some rehabilitation services, and some individuals convicted of felonies.  Form 8850 requires that these individuals self identify and provide information to confirm the employer is entitled to the tax credit.

Naturally, there has been some concern and hesitation among employers over whether this requested information puts them in violation of anti-discrimination laws.  However, the EEOC’s April 29th opinion letter should provide some reassurance.  In the opinion letter itself, the EEOC states that the Americans with Disabilities Act (“ADA”), Age Discrimination in Employment Act (“ADEA”), and Title VII of the Civil Rights Act of 1964 (“Title VII”) are not violated as the questions themselves on Form 8850 do not require applicants to actually disclose if they have a disability (which could be prohibited under the ADA), provide age related information (which could be prohibited under the ADEA), or whether they are a member of a protected group (which could be prohibited under Title VII.)

As always, there are caveats to remember here.  The EEOC is not giving employers the green light to ask for any information or documentation they want in order to qualify for the WOTC.  Rather, so long as employers strictly comply with Form 8850, taking part in the WOTC in and of itself does not mean an employer has violated an anti-discrimination law.


For a copy of the opinion letter:  https://www.eeoc.gov/commission-opinion-letter-federal-work-opportunity-tax-credit-form-8850

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