Tag: Foster Care Youth

  • WOTC and Other Tax Extenders Must Wait

    By

    Vaughn Hromiko

    The House – Senate Conference has come to an agreement on what is now dubbed The Middle Class Tax Relief and Job Creation Act of 2012.  Expectations are high that both the House and Senate will quickly pass the bill.  President Obama has already indicated he will sign the bill.
    Unfortunately, the tax extenders, including the general WOTC extension, were completely excluded from this legislation.  All WOTC categories except for those favoring military veterans must now wait to be extended by another yet future tax bill.
    As I’ve summarized before, this situation is not unusual for the Work Opportunity Tax Credit (WOTC) program. Of the eight times Congress has acted to renew or extend the WOTC program, three were passed retroactively months after the program’s legislative authority had expired.

    • The first was in March 2002 after WOTC expired on December 31, 2001.
    • The second was in October 2004, about ten months after WOTC expired on December 31, 2003.
    • The worst example to date was in December 2006, when the program was reauthorized almost 12 months after its expiration.

    In each of these events, the renewal was made effective retroactively back to the date of expiration.  In other words, employers were eligible to claim tax credits generated by properly certified employees hired between the expiration date and the date the WOTC program was renewed.
    We continue to anticipate a similar re-authorization in 2012. For this reason, my firm will continue to process and submit WOTC applications under all employee-eligibility categories — not just for veterans.
    As employers consider their strategy for 2012, they should remember that even though a general extension has not yet been passed, eligibility-categories for hiring military veterans are already authorized through 2012 by the VOW to Hire Heroes Act of 2011. The amount of tax credit currently offered for hiring unemployed veterans goes as high as $9,600 per qualifying hire.
    This is an excellent opportunity to more affirmatively recruit veterans for your workforce.

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  • Latest News on Payroll Tax Cut Extension and WOTC Renewal

    By

    Vaughn Hromiko

    I thought you might appreciate the following excerpt from a recent email update I received from WOTC Coalition President Paul Suplizio.  Some of this has been reported in the news but Paul’s perspective adds something important.  I am re-publishing this with his permission.

    In a statement [Monday], Speaker John Boehner and Majority Leader Eric Cantor said they will no longer require offsets for the $100 billion cost to extend the payroll tax cut to the end of the year, and are preparing a bill that will extend the payroll tax cut separately if the conference reaches no agreement, leaving the conference to continue working on unemployment insurance and Medicare doctors’ payments.

    The conference committee is being notified of this new Republican position, which means $100 billion of the total $160 billion cost of the payroll bill would not have to be offset.

    The conferees still have time to reach agreement on a total package, but if they don’t the Speaker is free to make the effort to pass a stand-alone bill extending the payroll tax only. This would remove payroll tax as a partisan issue, but the Speaker is likely to need Democratic support because of the roughly ninety Republicans who would not vote to increase the deficit.

    Senator Reid is expected to make the extenders part of the bill he has said he will introduce if the conference bogs down. He will have the option to bring it to a vote or attach it to any stand-alone payroll bill that passes the House.

    Unemployment compensation and doc fix remain “must do” issues, even if payroll tax is passed separately—thus we continue to work for the tax extenders to be added to HR 3630 in conference.

    If $40 billion for tax extenders is added, the total requiring offset would be $100 billion for unemployment insurance, doctors’ fix, and the tax extenders. Democrats are arguing unemployment insurance should not be offset, and a good case can be made for not offsetting the tax extenders.

    Comments: The Republican leadership’s concession on not requiring a budget offset to the “cost” of the payroll-tax-cut extension reduces the total amount of offsets needed to pass all of the priority items.  One of those priority items is the tax extenders, which will presumably include WOTC.
    What this boils down to is that we are likely to at least see legislation soon with tax extenders attached.  Whether Congress can pass it, of course, is a separate question.  Nothing is certain and the political environment remains volatile.

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  • NEW WOTC Forms, Electronic & FAX Filing and Transition Relief

    By

    Vaughn Hromiko

    Catching up with the VOW to Hire Heroes Act, which was signed by President Obama in November of last year, the Internal Revenue Service has issued an updated Form 8850 and some very important guidance.

    Links for your convenience:  The new IRS Form 8850.  IRS 8850 Instructions.  IRS Notice 2012-13

    Disconnected Youth: Although not unexpected, I should note that in preparing the updated IRS 8850 Pre-screening Notice, the IRS has removed the questions related to qualifying Disconnected Youth.  This category expired on December 31, 2010. 

    We’ve been clinging to the hope that it would be added-back with the extension of WOTC.  I personally have not given up on that hope.  Also, if I am not mistaken, the Department of Labor’s current instructions to State Workforce Agencies still requires them to reserve disconnected youth applications on file pending future instructions.

    Notice 2012-13: Notice 2012-13 provides guidance on a number of important issues and should not be overlooked.  I suggest a thorough reading.  Major topics covered include:

    • Background of the new veterans categories
    • Transition relief (a grace period extending the 28-day submission deadline for IRS 8850 for qualified veterans hired between November 22, 2011 and May 22, 2012)
    • The use of electronic signatures for IRS 8850
    • Signing or filing IRS 8850 by FAX transmission
    • Guidance for tax-exempt organizations claiming WOTC

    Request for Comments: In addition to the guidance provided by the IRS on these topics, the IRS is also requesting comments about (1) alternative methods for certification of qualified veterans and (2)alternative methods of filing Form 8850.

    In summary, with this notice the IRS has given us a lot to think about and a lot of work to do. 

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  • National Restaurant Association Turns Up WOTC Heat on Congress

    By

    Vaughn Hromiko

    In a letter today addressed to all members of Congress, the National Restaurant Association called on legislators to extend the Work Opportunity Tax Credit (WOTC) program and a 15-year depreciation allowance for certain kinds of assets important to the restaurant industry. 
    The letter, signed by Scott DeFife, Executive Vice President, Policy and Government Affairs, begins with the following statement.

    On behalf of the National Restaurant Association, I am writing to strongly urge Congress to prospectively and retroactively extend tax provisions that expired at the end of 2011.  Two particular provisions of significance to the restaurant industry are: 15-year depreciation for restaurants and the Work Opportunity Tax Credit (WOTC). We urge consideration of these measures as part of the discussions on extending through 2012 the payroll-tax reduction that expires at the end of this month.

    Read the entire letter here.
    Stay tuned.  There is more to come about the ongoing House-Senate conference currently seeking an agreement on extending the 2011 payroll-tax cut.   It’s not just the National Restaurant Association that is urging legislators to address WOTC and other tax extenders with this bill.

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  • Proposed Hire the Homeless Bill Advances in Utah Legislature

    By

    Vaughn Hromiko

    A proposal by Utah State Representative Brian King, D-Salt Lake City cleared committee on Thursday after the presentation of testimony by various groups.  The proposed tax credit program would offer a $1,000 state tax credit to businesses that hire individuals living in homeless shelters or supportive housing.  Read about it in Thursday’s Salt Lake City News Blog post by Eric Peterson.
    According to Representative King,

    “It’s basically going out and assisting both homeless individuals and the business community in the state of Utah to get individuals transitioned from being homeless to a more permanent setting– a home, a rental unit, something where they can really get their feet under them and move forward with their lives.”

    Royce Van Tassell of the Utah Taxpayers Association spoke against the bill during the committee hearing.

    “It’s not clear to the Taxpayer Association that social welfare is best conducted through the tax code,” Van Tassell said. “The fact is there is a $1,000 credit for each person and that money came from someplace and it will be paid for by somebody else.”

     
     

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  • Senate Committee on Finance Holds Hearing on Tax Extenders (Including WOTC)

    By

    Vaughn Hromiko

    Parallel to the House-Senate conference on extending the payroll tax cut, the Senate Committee on Finance is holding a special hearing on Tuesday to examine the 50 or more tax extenders that expired in December.  The hearing is titled: Extenders and Tax Reform: Seeking Long-Term Solutions.
    According to a Monday article in Accounting Today,

    At Tuesday’s hearing, Senate Finance Committee Chairman Max Baucus, D-Mont., ranking Republican member Orrin Hatch, R-Utah, and the witnesses will discuss how best to approach tax extenders in order to create certainty and allow businesses to invest confidently and create jobs.

    Witnesses scheduled to testify include Rutgers University economics department chair Rosanne Altshuler, George Mason University senior research fellow Jason J. Fichtner, University of Texas law professor Calvin H. Johnson, and U.S Chamber of Commerce chief tax counsel Caroline L. Harris.

    Many of these details can be had on the hearing’s page on Senate Committee on Finance’s website.  Click here.

    Submit a Statement for the Record (We all should do this now)

    You and your organization or business can submit a statement to the committee to get your views into the record.  It’s a simple process but there are a few details of protocol that must be observed.  The following is copied directly from the Senate website (emphasis added by underlining).
    Any individual or organization wanting to present their views for inclusion in the hearing record should submit a typewritten, single-spaced statement, not exceeding 10 pages in length. Title and date of the hearing, and the full name and address of the individual or organization must appear on the first page of the statement. Statements must be received no later than two weeks following the conclusion of the hearing.
    Statements should be mailed (not faxed) to:
    Senate Committee on Finance
    Attn. Editorial and Document Section
    Rm. SD-219
    Dirksen Senate Office Bldg.
    Washington, DC 20510-6200b

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  • WOTC Call to Action – New Developments for WOTC and Tax Extenders

    By

    Vaughn Hromiko

    There are new developments in the effort to include WOTC and other tax-extenders in the upcoming payroll tax cut bill. A Senate-House conference is currently negotiating to extend the payroll tax cut, which expires in February.
    Paul Suplizio, President of the WOTC Coalition, reports that Ways and Means Chairman Dave Camp is “waving off in advance an expected offer from Senator Baucus” to include tax extenders in the bill. Max Baucus is Chairman of the Senate Finance Committee. (more…)

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  • Senators Baucus and Reid — Tax Extenders Should Be Included In Payroll Tax Cut Deal

    By

    Vaughn Hromiko

    Negotiations are on again to extend the 2011 payroll tax cut until the end of 2012.  The House-Senate Conference met on Tuesday — the first time this year — and the road to an agreement appears rocky.  Optimism is alive – but there are also some big disagreements to sort through.
    Both sides of the discussion agree that a deal must be made before the end of February when the current 2-month extension expires. (more…)

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  • Minnesota Governor’s New Jobs Proposal

    By

    Vaughn Hromiko

    Minnesota Governor Mark Dayton has announced A Jobs Plan for Minnesota.  The proposal includes various measures designed to encourage hiring and to support workforce development and training. (more…)

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  • New Mexico State Graduate Employment Tax Credit

    By

    Vaughn Hromiko

    Here is a proposal to help qualifying graduates land jobs in the State of New Mexico.  We’ve added this to our watch list. (more…)

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