President Obama’s remarks this morning on his “fiscal cliff” negotiations with House Republicans signals optimism that a deal may be close. Both sides have made concessions but continue to push for additional concession from the other. Near the end of his remarks this morning, the President said,
“I remain optimistic, because if you look at what the speaker has proposed, he’s conceded that income tax rates should go up . . . I’ve said I’m willing to make some cuts. What separates us is probably a few hundred billion dollars. The idea that we would put our economy at risk because you can’t bridge that cap doesn’t make a lot of sense.”
As the tax and spend negotiations continue, President Obama’s most recent offer on Monday included an extension of the Work Opportunity Tax Credit program and other tax extenders. This has been consistent while the public focus of the negotiations has been on areas of deeper disagreement. Already this morning, the White House rejected House Speaker Boehner’s counter offer. (more…)
President Obama’s TV interviews scheduled for today may provide fuel for a potential breakthrough in tax and spending talks, according to Paul Suplizio, President of the WOTC Coalition. WOTC and numerous other tax provisions hang in the balance . . . although failure now may still be rectified after the new year. (more…)
A precarious moment has arrived for extending the Work Opportunity Tax Credit (WOTC) and other tax extenders. Republican leadership has expressed their general opposition to the $200 billion in “stimulus” included in President Obama’s budgetary demands. The Republican leadership has not specifically mentioned the $40 billion in tax extenders BUT the extenders (including WOTC) are part of the larger $200 billion stimulus package. (more…)
Some rough politics are on the horizon as Congress tries to divert the U.S. economy’s path away from the 2013 fiscal cliff. A small but not unimportant element in this effort is the passage of a tax extenders bill covering WOTC, empowerment zones and renewal communities, the research and development credit, and others similar tax incentives. (more…)
A Little History: This is Nothing New. The Work opportunity Tax Credit (WOTC) was created by the Small Business Job Protection Act of 1996. This Act authorized WOTC for a 12-month period. Then, in 1997, WOTC was re-authorized and extended for 9 months, followed by an additional 12 months in 1998. This process of expiration and re-authorization has been repeated by Congress nine times during the past 12 years. (more…)
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.
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.
The VOW to Hire Heroes Act was signed today by President Obama. (see Business Week article from today.) As previously mentioned, this bill expands the eligible-veterans categories under the Work Opportunity Tax Credit (WOTC) program and extends the new categories through December 31, 2012. Unless the legislative language was modified prior to final passage, my understanding is that the new WOTC categories will become effective immediately. (more…)
As far as I know, no one has seen the nitty gritty of President Obama’s jobs proposal (as outlined in yesterdays speech), because legislation to implement the proposals has not yet been offered. According to articles published after the speech in the New York Times, Los Angeles Times, and San Francisco Chronicle, we do have estimates of the dollar amounts involved. (more…)
This morning during a speech at the Washington Navy Yard, President Obama took notice of high unemployment among US military veterans. Although he did not mention the Work Opportunity Tax Credit (or WOTC) by name, he described two new or expanded hiring tax credits obviously designed to fit into the WOTC rubric. (more…)