The Work Opportunity Tax Credit (WOTC) has received a lot of attention from legislators this year. A report recently released by the Senate Finance Committee’s Employment and Community Development Taskforce outlined a total of 16 bills, all introduced in the current Congress. Each would either expand, increase, or extend the WOTC program.

Yesterday, Senator Corry Booker (D, NJ) and Representatives Bonnie Watson Coleman (D-NJ), and Ilhan Omar (D-MN) introduced yet another bill. More correctly, the Federal Jobs Guarantee Development Act was re-introduced yesterday, since Senator Booker originally presented this bill to the previous Congress on April 25, 2018.

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The Senate Finance Committee’s Employment and Community Development Taskforce has finally released its report. Unfortunately, the consensus about WOTC subtly mentioned earlier this month by Senator Rob Portman (R-Ohio) is absent from the document. But that’s not all bad.  Perhaps we need to read between the lines.

Download the report here.

Per the report, the group was tasked to examine the following six tax incentive programs:
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The Senate Finance Committee released the first 3 of 6 reports investigating the status and future of numerous federal tax incentive programs.

According to an article published by Bloomberg on Tuesday, “Two of the reports released, on energy and individual tax provisions, didn’t reach definitive conclusions, indicating either weak support or divided opinion for some of those provisions.”

You can download those reports here:  (energy)  and  (individual)

What About WOTC?

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Photography by Suzy Hazelwood.

According to the U.S. Department of Justice, more than 10,000 former prisoners are released every week across America. They need jobs. In fact, the Prison Policy Initiative reports that 2 years after release, more than 30% are still unemployed.

Gratefully, the State of Iowa offers a special tax benefit to small businesses that hire ex-felons residing in that state. In addition to the federal Work Opportunity Tax Credit (WOTC), Iowa small businesses can receive a tax deduction of up to $20,000 per qualifying hire. Since this is a deduction (not a tax credit), the actual tax effect depends on the business’ tax rate.

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