So Far, So Good – WOTC Program Survives in Senate’s Revised Tax Reform Plan

Senator Orin Hatch, R Utah

Yesterday, Chairman Senator Orin Hatch (R, Utah) released a revision to the Senate’s tax reform proposal. The revision is scheduled today for markup before the Senate Committee on Finance.

While there are substantial changes in the document, no additional threat to the Work Opportunity Tax Credit (WOTC) has materialized. The question of future amendments to the bill remains alive.

Senate Finance Committee Reports on Tax Extenders Bill

Last week, on August 5th, the Senate Finance Committee reported its version of the 2015 tax extenders bill, S 1946, The Tax Extension Relief Act of 2015.

 “The Committee on Finance, having considered an original bill, S. 1946, to amend the Internal Revenue Code of 1986 to extend certain expiring provisions, and for other purposes, reports favorably thereon without amendment and recommends that the bill do pass.”

This bill would authorize the Work Opportunity Tax Credit for 2 additional years, retroactively beginning January 1, 2015.  It would also extend WOTC to cover a new target group — long-term unemployment recipients.

“The term ‘qualified long-term unemployment recipient’ means any individual who is certified by the designated local agency as being in a period of unemployment which (A) is not less than 27 consecutive weeks and (B) includes a period in which the individual was receiving unemployment compensation under State or Federal law.’’

That sounds simple enough.  It will still be some time before we find out where the House of Representatives will stand on the issue.

 

Here’s the Senate Finance Committee’s page to track this legislation.  Click through to find the legislative text, the Committee’s Report, and other items.

Tax Extenders Bill Scheduled for Consideration in Senate Finance Committee Next Week

The Senate Finance Committee has scheduled a hearing to consider the Chairman’s markup of a new tax extenders bill.  The Committee will consider the bill on Tuesday, July 21.  In its current form, the bill would give the Work Opportunity Tax Credit a 2-year retroactive extension — January 1, 2015 through December 31, 2016.

The bill will extend federal Empowerment Zone tax benefits for the same period.

Read the Chairman’s markup here.

Urgent Chance THIS WEEK to Include WOTC in Senate Highways Bill Extension

The following update from Paul Suplizio, President of the WOTC Coalition, outlines a very time-limited potential opportunity to get WOTC back on track for 2014.  To have any impact, WOTC supports will need to act promptly.  Congress will wrap up its business and leave town by the end of this week for the Independence Day recess.

The following is published here with permission.

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Subject: Opportunity Opens This Week For WOTC Extension On Highway Bill
From: “Paul Suplizio” <wotc@cox.net>
Date: Mon, June 23, 2014 4:56 am

June 23, 2014

An opportunity has arisen and if we swing into action and go all-out this week to capitalize on it, we might just see WOTC extended till the end of the year.

The opportunity arises in the Senate Finance Committee which must mark up a bill to reauthorize the almost empty Highway Trust Fund from which Federal capital expenditures for roads and bridges are made.

The fund needs $90 billion over ten years, but $8 billion will cover it for the rest of the year. A bill has to be passed in July because the fund runs dry in August. Because nobody can see a way to produce $90 billion in revenue to pass a long-term reauthorization, Senator Wyden and Senator Hatch are almost certain to write a short-term extension till year-end—Hatch says he’s sure it will be a short-term extension.

Wyden and Hatch are also aware that many senators on the Finance Committee are looking at this bill as a vehicle for their renewing their favorite tax extender for the year—and it’s possible Wyden and Hatch would allow a limited number of extenders to ride along on the Highway bill if there were a clamor for this or that extender by Finance Committee members when the committee marks up the bill.

Senator Wyden has been planning to call a markup of the Highway Trust Fund measure for this week because Congress will leave this Thursday or Friday for the July 4th recess and not return until July 7th. We aren’t sure whether he’ll be able to do it—the bill is linked to a long-range highway bill in the Energy and Commerce Committee that could lead to snags postponing markup until after the recess.

But we must assume there will be a markup Wednesday or Thursday, so we have very little time. Fortunately we are well positioned with all of us linked to Finance Committee senators and their legislative aides since our campaign last December. Now we have to swing into action contacting these same Finance Committee senators, Democrats and Republicans, urging them to include a year-long extension of WOTC (for 2014) in the Highway Trust Fund bill.

We’ve already laid the groundwork for you with a letter that was faxed to Senator Reid and Senator McConnell and every Finance Committee senator early this morning. The letter is one way to lay out our case for giving WOTC high priority for attachment to the Highway bill. This is one approach, you may bring in other arguments. In your contacts, be sure to start by underlining how you as a business are using WOTC successfully to hire eligible workers in the senator’s state, or how you as a service organization (veterans, disability, minority, community, etc) are using WOTC to place people you serve into private sector jobs in the senator’s state (our letter doesn’t include this point).

Allowing WOTC to remain expired for this year would not only cost WOTC workers more than 300,000 jobs, but will cost our WOTC employers who’ve been continuing to hire since January 1st, but cannot get their certifications approved till WOTC is renewed, around $1.7 billion dollars in financial liquidity that could have been invested in their business this year rather than next year or later.

WOTC has a strong case for high priority consideration in the Highway bill. The rest is up to us. Most of us haven’t talked to senators about the Highway bill, so this is a good time to reach out anew about the opportunity this bill presents to get something done and press the idea that, since it’s a short term vehicle covering this year, it would be a suitable vehicle for an extender like WOTC, whose continued expiration imposes costs in lost hires to the people it’s meant to serve, as well as costs in delayed tax savings which could have been invested in states and communities our employers serve.

Remember, we want to take this message to members of the Senate Finance Committee, Democrats and Republicans, and to Majority Leader Harry Reid and Minority Leader Mitch McConnell via whatever routes you have available. It’s time to pull out all stops!

We will keep you informed. Please contact me if you have any questions, 703-587-4566.

PAUL E. SUPLIZIO
President, WOTC Coalition

Senate Hits Procedural Breaks on EXPIRE Act – Hatch and Wyden Working on Solutions

[Updated 05/16/2014 at 12:15 P.M. Pacific Time.]

Not withstanding the Senate’s overwhelming bipartisan support for the EXPIRE Act as demonstrated on Monday, a procedural move by Senate Democratic leaders has resulted in a (hopefully temporary) Republican revolt against the bill.

Yesterday, after amending HR 3474 to include the full language of the EXPIRE Act, Senate leadership called for a cloture vote. They did this, however, after blocking Republican attempts to bring up amendments. As a result, the cloture vote failed 53 to 40 with Republicans loudly protesting their exclusion (60 votes are necessary).

As reported by CNN Capital Hill reporter Lisa Desjardins,

“It is a rare, strange day when Senate Republicans vote to block billions in tax cuts. But that’s what happened Thursday when they chose to freeze a massive tax credit package in order to protest how Democrats are running the chamber.”

Republican Senate leaders, of course, express a very different view of the situation. Republican Leader Mitch McConnell said on the floor,

“This is bigger than any one bill. What (Democrats are) doing is muzzling the people of this country, a gag order on the people we were sent here to represent.”

Paul Suplizio of the WOTC Coalition reports this morning, however, that Senate Finance Committee Chairman Ron Wyden (Dem of Oregon) and Ranking Committee Member Orin Hatch (Rep of Utah) are working together to broker amendments.

“Finance Chairman Ron Wyden and Ranking Member Orrin Hatch are committed to working together with other senators who are proposing amendments, and accommodating them if possible. Wyden and Hatch are energetic and respected by their colleagues so we have reason to be optimistic; both made floor statements agreeing to work together to get the extenders back on track.”

Frequently, amendments can be resolved without a floor vote, for example, by promising a vote on another bill. Wyden and Hatch aim to produce a short list of amendments to be voted on, which will then be cleared with Senator Reid and Senator McConnell.

It remains uncertain how long it will take Wyden and Hatch to deal with around a hundred amendments, but the process can move quickly if senators cooperate. We have the top leaders and two of the smartest minds in the Senate tackling this problem—we must give them a chance.

Draft Senate Tax Extenders Bill Published Today – WOTC Yes, Empowerment Zones No

The markup of the Senate Finance Committee’s tax extenders bill, which was scheduled for Wednesday, has been postponed until Thursday. The bill’s formal name is the “Expiring Provisions Improvement Reform and Efficiency (EXPIRE) Act.

The Chairman’s Mark was published today and is available on the Senate Finance Committee’s website.  It will be considered by the full Committee on Thursday, amendments offered and approved, etc. It will then pass before the entire Senate for a vote.

The EXPIRE Act was presented this morning as a bi-partisan offer by Senate Finance Committee Chairman Ron Wyden, D-Ore., and the committee’s Ranking Minority Member Orrin Hatch, R-Utah.

The bill includes a retroactive 2-year extension of WOTC, mostly intact. The Empowerment Zone Employment Credit, however, is missing from the bill. If this omission makes it through Thursday’s markup, it will also mean that empowerment zone residents will no longer be recognized as designated community members for purposes of the Work Opportunity Tax Credit (WOTC).

Here is the Senate Finance Committee’s Press Release.

Here is a summary of the bill and here is the proposal in its entirety.

The bill gives each of the following employment based tax credits a 2-year extension:

  • Indian employment tax credit
  • Employer wage credit for activated military reservists
  • Work Opportunity Tax Credit

Also of interest to many WOTC Planet readers, the Research and experimentation tax credit (aka R&D) also has a 2-year extension.

Action Required

Paul Suplizio, President of the WOTC Coalition recognized the delay as an opportunity for WOTC proponents to reach out to Republican committee members and to request their support for the bill in markup.

If a majority of Finance Committee Republicans join in approving the bill Thursday, it will significantly increase the odds of passing the Senate. Please contact your Committee Republican senators, other than Senator Hatch, and urge them to vote to approve the EXPIRE Act when it comes before the Finance Committee on Thursday.

 

 

Senator Chuck Grassley Senior Republican on Senate Finance Committee Predicts Tax Extenders

According to a recent article in The Gazette of eastern Iowa, US Senator Chuck Grassley of Iowa predicts that many tax extenders will be renewed in 2014. Senator Grassley is the Senior Republican member on the Senate Finance Committee.

There won’t be any extension before Christmas, Grassley predicted, but not because of political opposition to the credits. Based on past performance, he said Wednesday, Congress will come back after the New Year and approve four dozen or more tax credits.

“There are a lot of economic interests” represented in the tax credits, he explained. Those interest groups collectively “put a lot of pressure on Congress to re-institute the credits.”

So, why wait?  

The delay, Grassley said, can be attributed to the ongoing discussion about “massive tax reform.”

If congressional leaders – in this case Finance Committee Chairman Max Baucus, a Montana Democrat, starts talking about extending the credits “it looks like you’ve given up on tax reform,” Grassley said, adding “which isn’t going to happen before Christmas.”

Read the entire article in The Gazette.

Tax Extenders Have Stalled while Last Chance for WOTC Looms (Your Immediate Action Needed)

It appears the opportunity for a general tax extenders bill has expired for 2013. With a contentious election year approaching, the nation will likely wait until 2015 before Congress takes up the issue — after the 2014 elections.  This is truly unfortunate given that almost 60 tax provisions expire on December 31, 2013.   Here’s the entire list, published by the Joint Committee on Taxation.  The Work Opportunity Tax Credit (WOTC) is one of the expiring provisions.

Given the entire nation’s current hypersensitivity to all things health-care, however, Congress retained doc-fix legislation as an end-of-year priority. While there was some hope for a real doc-fix solution, it looks like another temporary fix is scheduled for markup on December 12th.

The WOTC Coalition is pressing for a temporary extension of the Work Opportunity Credit to be included with the doc-fix bill.

We still have a good opportunity if every Coalition member will act. The last “must-do” bill the Senate will complete will be a temporary Medicare doc fix measure to prevent a 24% cut in doctor’s payments. We are working to get the Senate to put a one-year WOTC extension into this bill because veterans, people with disabilities, and food stamp recipients, at-risk youth, and low-income seniors are as deserving as doctors and should have top priority for inclusion in this bill.

Time is very short! Paul Suplizio, President of the WOTC Coaltion offers two specific action steps designed to get WOTC into the upcoming bill. The following is published here with permision.

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From: “Paul Suplizio” <wotc@cox.net>
Date: Thu, December 05, 2013 8:15 am
December 5, 2013

Subject: Prompt Action With Senators Can Win Temporary WOTC Extension

Action on a package of extenders before Congress adjourns has been ruled out, but we don’t accept that for WOTC, which represents the nation’s promise of jobs for veterans, people with disabilities, food stamp recipients and others with the highest unemployment rates in the labor market.

We cannot let these million jobs disappear for 18 months—that’s what will happen if WOTC isn’t renewed before Congress leaves town, because odds of a tax bill passing in an election year are slim and it will be up to the new Congress to deal with extension in 2015.

We still have a good opportunity if every Coalition member will act. The last “must-do” bill the Senate will complete will be a temporary Medicare doc fix measure to prevent a 24% cut in doctor’s payments. We are working to get the Senate to put a one-year WOTC extension into this bill because veterans, people with disabilities, and food stamp recipients, at-risk youth, and low-income seniors are as deserving as doctors and should have top priority for inclusion in this bill.

There are two Senate meetings coming up where senators who support WOTC must speak out: at the Democratic and Republican party meetings on Monday and Tuesday when the Senate returns from recess, and at the Finance Committee markup of the doc fix bill on December 12th.

Here are the two actions you should take:

Action Number 1:
Immediately contact your Democratic and Republican senators by e-mail, fax, and telephone with this message:

“WOTC will expire on December 31st with the loss of a million jobs for veterans, people with disabilities, food stamp recipients and others, and there’s little chance it will be renewed before the next Congress. Please ensure the nation’s commitment to these jobs for those with the highest unemployment rates is upheld by speaking out at your Party meeting when the Senate returns, and insist that a one-year extension of WOTC should have the highest priority for inclusion in the “doc fix” bill the Senate will pass before adjournment. Ask your Leader to work to include a WOTC extension in an amendment when the doc fix bill comes to the Senate floor. A WOTC extension will not increase the Federal deficit—it will have the same impact on revenues next year as this year.”

Action Number 2:
If your senator is a member of the Senate Finance Committee, fax him or her a letter on your company’s letterhead, and then follow up a phone call to their tax legislative assistant, with this message:

“When the Senate Finance Committee meets to mark up the Medicare doctors payments bill on December 12th, please support an amendment to include a one-year extension of WOTC in the bill; otherwise, one million jobs for veterans, people with disabilities, food stamp recipients and others will expire with the likelihood they will not be renewed till the next Congress. Please uphold the nation’s commitment to those experiencing the highest unemployment rates in the jobs market by ensuring the Finance Committee acts to include a WOTC extension in the “doc fix” bill the Senate will pass before adjournment. A WOTC extension will not increase the Federal deficit—it will have the same impact on revenues next year as this year.”

Please be aware your Coalition has been working for an amendment in the Finance Committee for a one-year WOTC extension since last week. We are in touch with Senator Baucus’ people and other members of the Finance Committee who might offer our amendment. Our veterans organizations, and organizations serving people with disabilities have been mobilized to weigh in. We will keep you informed and will be calling on you again—this is our last best opportunity before 2015 and we know you’ll pitch in to get the job done.

Please don’t hesitate to call if you have any questions or need our assistance in your efforts, 703-587-4566.

PAUL E. SUPLIZIO
President, WOTC Coalition

Congress Takes First Steps Toward 2013 Tax-Extenders Bill

The National Journal reported yesterday:

Legislators on Thursday unveiled a bicameral, bipartisan proposal to repeal and replace the sustainable growth rate formula, which determines Medicare payments for physicians. One expert called it “above and beyond” anything else he’s ever seen.

It’s “above and beyond” because previously, Congress has repeatedly kicked the recurring Medicare-payments problem down the road.  Perhaps you’ve heard of the annual “doc-fix” bill?  This current proposal, flowing from efforts in both branches of Congress, suggests we actually fix the problem.

How is this related to tax-extenders?

Annual tax-extenders legislation is similar to the recurring Medicare doc-fix and will be dealt with by many of the same Congressional players.  Paul Suplizio, President of the WOTC Coalition, noted this morning that the draft bill to fix the “doc-fix” is the first overt step towards an overall tax-extenders bill.

The tax-writing committees’ preparing a bill for passage before December 31st to avoid disruption in doctors’ willingness to see Medicare patients is a first step toward a year-end extenders bill. The prospect of a bill drawn up by Ways and Means and Finance to cover expiring tax provisions like WOTC is now a reality. 

We can look forward to decisions by Senator Baucus and Congressman Camp on extending tax code provisions due to expire at year-end, including WOTC and VOW To Hire Heroes Act veterans tax credits, but we don’t expect those decisions until around Thanksgiving.

Last summer, the House of Representatives began expressing interest in actually fixing these recurring problems. In June 2012, the House Ways and Means Committee held a hearing to discuss how to evaluate the numerous tax incentive programs caught up in the tax-extenders process.

The conclusion? As part of comprehensive tax reform, Congress would eventually evaluate each program caught up in the recurring tax-extender problem. Programs found worthy of further use will be made permanent — the rest dropped for good.

For now, a comprehensive fix will probably have to wait.  Unlike most other federal tax incentive programs, however, a permanent Work Opportunity Tax Credit (WOTC) is actually on the table this year.  Both the White House and Democratic Senate Leaders already express support for permanent WOTC. Most Republican House members, on the other hand, are not yet fully on board.

Republican members of the House of Representatives are therefore the prime targets for immediate lobbying efforts. This is the subject of today’s brief from the WOTC Coalition’s Paul Suplizio.

The following is published here with permission.

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Subject: Tax-Writing Committees Take First Step
Toward December Extenders Bill
From: “Paul Suplizio” <wotc@cox.net>

November 1, 2013

Yesterday, the chairmen and ranking minority members of the House Ways and Means and Senate Finance Committees announced a bi-partisan discussion draft for a permanent solution to what has been called the Medicare “doc fix,”—an annual rite where Congress passes a bill to block a 24% cut in Medicare doctors’ payments scheduled to take effect on January 1st under current law.

The tax-writing committees’ preparing a bill for passage before December 31st to avoid disruption in doctors’ willingness to see Medicare patients is a first step toward a year-end extenders bill. The prospect of a bill drawn up by Ways and Means and Finance to cover expiring tax provisions like WOTC is now a reality.

We can look forward to decisions by Senator Baucus and Congressman Camp on extending tax code provisions due to expire at year-end, including WOTC and VOW To Hire Heroes Act veterans tax credits, but we don’t expect those decisions until around Thanksgiving.

The tax-writing committees proposing an extenders bill is a long way from getting a bill passed in both houses. The proposed “permanent” doc fix would freeze fee-for-service doctors’ payments for ten years while allowing performance incentive payments, so will be controversial. Blocking the 24% doctors’ pay hike alone will cost the Treasury $150 billion, making this a major bill. We can argue the doc-fix bill should be a stand-alone measure, but with time running out before Congress adjourns in mid-December, that’s unlikely to work. For the tax extenders, it may be the last ship leaving port.

Many House Republicans will lean to voting “no” on any bill adding to the deficit, so an extenders bill may need to be passed with Democratic votes. This means whether the bill gets a vote at all will depend on Speaker Boehner’s willingness to allow a vote.

We reiterate: it’s imperative we use the time we have now to re-double our efforts urging every Republican in the House and Senate to work to make WOTC a permanent part of the tax code. Our relations with key Democratic members are firm, and are reinforced by the President’s support for permanent WOTC.

Republican senators and Speaker Boehner, Congressman Camp, and Congressman Ryan need to be persuaded that WOTC belongs permanently in the tax code, and they will be persuaded if they hear often enough from their colleagues—our own Republican congressman and senators—that WOTC should be made permanent in the next tax bill Congress brings up.

Our best chance of success is when we, our clients, and people in states where we have operations, contact Republican congressmen and senators targeted in our 50-state lobbying plan and urge them to tell their leaders they support making WOTC permanent in the tax code.

PAUL E. SUPLIZIO
President, WOTC Coalition

ETA Form to Be Short Lived – Empowerment Zone Omitted from New WOTC Characteristics Form

It is quite sad.  Just 2 days before the Senate Finance Committee completed its markup of the Family and Business Tax Cut Certainty Act of 2012, the Department of Labor issued Training and Guidance Letter (TEGL) 04-2012.

TEGL 04-2012 introduces the Department’s updated Form ETA 9061, which is the Individual Characteristics Form included in the WOTC program’s employee-application for certification.

Why is it sad?

  • TEGL 04-2012 intentionally omitted the WOTC programs’ Empowerment Zone element for the Designated Community Member target group.
  • It also completely omitted the Summer Youth target group because by definition a Summer Youth is someone who lives within an Empowerment Zone.

These omissions make some sense, given the fact that the Empowerment Zone program expired on December 31, 2011.  However, the Family and Business Tax Cut Certainty Act of 2012 (aka tax extenders bill) now proposes to retroactively renew the Empowerment Zone program for 2 years through December 31, 2013.

In other words, when the tax-extenders bill becomes law, the updated Form ETA 9061, which omits all reference to Empowerment Zones, will have been rendered retroactively obsolete before it was even published.

There is a potentially BIG administrative hassle hiding in this little mess.  TEGL 04-2012 gives employers and their representatives 90 days to complete their transition from the old ETA 9061 to the updated version.  It doesn’t make sense, however, to use the new form now or in the future if the tax extender bill will have rendered it obsolete retroactively to January 1, 2012.

Depending on when Congress is able to pass the tax-extenders, employers who transition in time for the current 90-day deadline will almost certainly face another transition as the Department of Labor issues a second update to reverse the omissions of the recent form.

Let us suggest to the Department of Labor that it should temporarily suspend the transition requirements of TEGL 04-2012. Allow employers and State Workforce Agencies to continue using the current versions of their ETA Forms until all of the pending tax-extender issues affecting WOTC have been fully settled by Congress and the President.