Thursday afternoon, the Ways and Means Committee finished the House’s markup of the Tax Cut and Jobs act, voting down amendments to add back the Work Opportunity Tax Credit (WOTC) and a number of other specialized tax benefits.
While this is bad news for WOTC proponents, better news emerged from the Senate today. The Senate Finance Committee released its own version of tax reform and it does not include the dreaded WOTC repeal.
Beginning on page 106 of the proposal, the Senate bill treads very lightly on existing business credits. Only three benefits are specifically modified including:
- a reduction of a tax credit based on expenses related to the clinical testing of certain drugs,
- a reduction of a rehabilitation credit earned through investments in rehabilitating historical properties, and
- the repeal of an existing deduction for unused general business credits for which the carry-forward period has expired.
Since WOTC is a “general business credit”, it would likely be affected by the last provision. But the repeal does not affect the tax credit itself — only the ability of tax payers to eventually claim expired WOTC credit as a deduction if they were not able to utilize it before the end of WOTC’s 20-year carry-forward period.
The Wall Street Journal published a helpful comparison of the Senate and House version of tax reform. Click on the image to review the table in larger format.
The Senate bill is now up for discussion and additional markup. More details will be fleshed out in coming days.
According to The Hill this evening, the differences between the two bills:
. . . likely sets up a difficult conference negotiation between the chambers later in the year, assuming Senate Majority Leader Mitch McConnell (R-Ky.) can round up enough votes to pass the legislation — an uncertain prospect at this point.
