This month, the House Ways and Means Committee released tax proposals that may eventually be included in the massive budget reconciliation bill currently making its way through Congress. For a general summary, check out this article in the Journal of Accountancy.

Our interest here is the proposal for a temporary expansion of the Work Opportunity Tax Credit (WOTC). The legislation replaces just a few key terms in the Internal Revenue Code, where the WOTC program is defined. Yet, the effect would be very valuable for employers who participate in the WOTC program.

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Great news! The IRS has provided a new grace period extending the deadline for WOTC applications of employees who live in a federal empowerment zone.  Two WOTC target groups are affected.

  • Designated Community Residents (Group D)
  • Summer Youth Employees (Group F)

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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.”

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