Maybe you’ve heard that the Work Opportunity Tax Credit (aka WOTC) is slated to expire on December 31, 2019. And that makes you nervous.
But should it?
Forty years of productive history suggest that WOTC will still be around for years to come.
WOTC is part of the U.S. tax code. Like dozens of similar code provisions, Congress wrote it in a way that requires them to revisit the program from time to time. The upcoming expiration date signals that the moment has arrived again.
Has it happened before? Yes. Many times.
Most human resources departments use a checklist when hiring new employees. Lists are so important, whether they are printed on paper or managed electronically by a paperless onboarding system. Lists help us to consistently and fairly walk new workers through a litany of important tasks.
Is there something important missing from your hiring checklist?
Keep reading to find out.
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.
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:
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.”
What About WOTC?
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.
Building on the success of the Work Opportunity Tax Credit (or WOTC), Senator Tim Kaine (D-VA) introduced a bill to expand employment opportunities for military spouses.
Known as the Jobs and Childcare for Military Families Act of 2019, Senate Bill 1802 would recognize “Qualified Military Spouse” as a new WOTC program target group.
On June 20th, after a marathon mark-up session and by a vote of 24-17, the US House Ways and Means Committee advanced a number of measures. Of most importance to the Work Opportunity Tax Credit (WOTC), was H.R. 3301, “The Taxpayer Certainty and Disaster Relief Act.” The bill would extend for one year a number of incentives scheduled to expire at the end of 2019, including the Work Opportunity Tax Credit. This would extend WOTC and other provisions listed through 2020.
On June 5, 2019, Representative Steve Cohen (D, District of Columbia) introduce HR 3123, the Supermarket Tax Credit for Underserved Areas Act. This bill proposes both new and increased tax incentives for operators who set up new supermarkets within designated areas nationwide.
The bill has eleven cosponsors from the District of Columbia and the states of Arizona, California, Illinois, Maryland, Massachusetts and New York.