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.

The tax credit amount for the new target group would max out at $5,000. It would be based on the first $10,000 of the certified employee’s first-year wages. Unlike every other WOTC target group, re-hired former employees would be eligible.

Also, for this target group only, the bill would dispense with the 25% tax credit rate that’s usually applied if the employee works less than 400 hours.  The tax credit would be calculated as 50% of qualified wages, as long as the employee works at least 120 hours.