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.
A Concise WOTC History
WOTC arrived on the scene in 1996 as part of the Small Business Job Protection Act. Congress created it to replace (and improve upon) a similar tax provision called the Targeted Jobs Tax Credit (TJTC). Employers first enjoyed the TJTC way back in 1978.
Since 1996, WOTC has “expired” and been reauthorized by Congress ten times.
Have a look at the dates.
- 1996, Created by the Small Business Job Protection Act
- 1997, Reauthorized by the Taxpayer Relief Act
- 1999, Reauthorized by the Ticket to Work and Work Incentives Improvement Act
- 2002, Reauthorized by the Job Creation and Worker Assistance Act
- 2004, Reauthorized by the Working Families Relief Act
- 2006, Reauthorized by the Tax Relief and Health Care Act
- 2007, Reauthorized by the Small Business and Work Opportunity Tax Act
- 2010, Reauthorized by the Tax Relief, Unemployment Insurance Reauthorization & Job Creation Act
- 2012, Reauthorized by the American Taxpayer Relief Act
- 2014, Reauthorized by the Tax Increase Prevention Act
- 2015, Reauthorized by the Protecting Americans from Tax Hikes Act
The reauthorization of 2015 provided five additional years of operations before WOTC would again come under review in 2019. This has been the longest single authorization period in the WOTC program’s history.
At this time, Congress has no less than 17 current bills under consideration, all of them proposing to either extend or expand the scope of the WOTC program. At least two bills propose to make WOTC permanent! No other similar tax provision is receiving as much positive legislative attention.
We can never promise the future. However, based on a long and favorable history, employers should continue to benefit now, as always, from participating in WOTC. Postponing or delaying your participation will likely result in opportunities lost and taxes overpaid.