WOTC Extended – Five More Years

Photo credit to Jacquelyn Martin/AP (Dusk falls over the Capitol, Monday, Dec. 21, 2020, in Washington)

Good news for the WOTC Program!

The Omnibus Spending bill signed by President Trump on Sunday includes a provision that extended the Work Opportunity Tax Credit (WOTC) for five more years.  The new expiration date for the program is December 31, 2025.  This bill made no other changes to the WOTC program.

Last Friday, Senator Rob Portman (R-OH) made an appearance during a webcast hosted by the Urban-Brookings Tax Policy Center.  His remarks were optimistic about including a number of tax-extenders in a pandemic stimulus bill after the elections.  I think that as a member of the Senate Finance Committee, Portman just might know something about it.

As described by Law 360, Portman called for expanding the Work Opportunity Tax Credit and making WOTC permanent.  His WOTC expansion would create a new Target Group for people unemployed because of the pandemic. The U.S. Senate included this same provision in its July stimulus proposal.  See post herein, “Senate COVID Bill Would Expand WOTC Again.”

DOL Announces WOTC Grant Recipients

The U.S. Department of Labor announced twelve state recipients of $2.5 million in grants to help improve their WOTC programs. WOTC is an acronym for Work Opportunity Tax Credit.  Agencies in some states suffer from multi-year processing backlogs and severely need improvements.

According to Assistant Secretary of the Employment & Training Administration John Pallasch:

“The U.S. Department of Labor is committed to helping states that are in need of upgrading their Work Opportunity Tax Credit processing systems or conducting other activities to reduce their backlogs to ensure U.S. employers can benefit from the Federal tax credit.”


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.