Photography by Karolina Grabowska
Today, the U.S. Senate released its version of round-two Covid-19 relief. CARES 2.0, officially titled the “American Workers, Families, and Employers Assistance Act,” includes a substantial expansion of the Work Opportunity Tax Credit (WOTC).
Unfortunately, CARES 2.0 does NOT include an extension of WOTC beyond 2020. Hopefull an extension will come later.
The Senate bill proposes to add a new WOTC target group known as “2020 COVID-19 Unemployment Recipients.” The definition of a qualified employee would be very simple. The person must have either received (or have been approved to receive) unemployment compensation during the week of their hire date, or the week immediately preceding their hire date.
Image of Senator Rob Portman of Ohio
According to a recent article published by Law360, some members of Congress are considering making general business tax credits, including the Work Opportunity Tax Credit (WOTC), refundable. The change would likely be temporary, as a contribution to COVID 19 recovery efforts.
From the article:
“Sen. Rob Portman, R-Ohio, a senior member of the Finance Committee, said he and other Republicans were looking into the idea of allowing a business to receive a refund, or cash payment. It would be equal to the business’ so-called general business credit, which represents the cumulative value of various tax credits, which currently can be carried back for one year or carried forward over 20 years under Internal Revenue Code Section 39.”
Most tax credits are not refundable. You can use the tax credit up to a certain amount to offset taxes owed. The amount leftover is then reserved (or carried forward) to be used against tax owed next year. If, however, a tax credit becomes refundable, then in essence it can be filed for a cash payment from the government, even if no tax is owed.
Portman also suggested Congress may examine ways to make all of the various tax credits more appealing to businesses. “We can look at all of the credits. If you look, there are 38 of them,”
This image includes members of the Equal Employment Opportunity Commission – Victoria Lipnic, Janet Dhillon, and Charlotte Burrows.
Today at approximately 2:00 PM Eastern, the U.S. Equal Employment Opportunity Commission (EEOC) voted to publish a new formal opinion letter clarifying that the proper use of IRS Form 8850 does not violate any of the anti-discrimination laws enforced by the EEOC.
IRS Form 8850, titled “Pre-Screening Notice and Certification Request for the Work Opportunity Credit” is a document employers must acquire from new employees “on or before” the day of their job offer, to qualify for the Work Opportunity Tax Credit. View the form here. Because this form inquires into an employee’s date of birth and disability, some employers express concern about potentially violating laws that prohibit such inquiry prior to making the hiring decision.
The bottom line is that proper use of IRS 8850 is not a violation of the Civil Rights Act or the Americans with Disabilities Act (ADA).
These are unexpected and difficult days. You’re very fortunate if Covid-19 has not disrupted your job or your workplace to some degree. Our office is experiencing the same kind of challenges.
Many people are working from home. If that’s an option in your industry, it’s a great blessing. These circumstances are forcing many of us to learn new ways to get it all done. When the Covid-19 contingencies are over, some industries will almost certainly choose to continue the work-from-home trend.
For now, however, many enterprises have little choice but to lay off workers. Millions of people are (at least temporarily) losing their jobs. It’s painful. It’s scary. But don’t lose hope because . . .