Talk of Tax Extenders Bill — Mopping Up After Tax Reform

Senator John Thune

I received this link to a recent article in Accounting Today from a colleague and a reader of The WOTC Planet.  According to the article, Senator John Thune (Republican from South Dakota) has confirmed the Senate’s intention to act on expired tax incentives, which are typically reauthorized with a tax extenders bill.

Thune is currently Chair of the Senate Commerce Committee.  According to Accounting Today:

The Senate plans to act on a slate of expired tax credits before month’s end, according to John Thune, the Senate’s No. 3 ranking Republican who serves on the Finance Committee. Lobbyists have been told the package of “tax extenders”—renewing tens of billions of dollars in expired tax incentives—could be hitched to must-pass government funding legislation expected in coming weeks.

I found a related mention, published on November 16 in the Wall Street Journal.

. . . [S]enators are also talking about a separate tax-extenders bill that would follow the broader [tax-reform] bill.

It’s not clear what would be in such a package, but Finance Committee members have mentioned renewable-energy tax breaks and the New Markets Tax Credit, which encourages investment in struggling areas

A 2017 tax extenders bill would offer another avenue to restore expired tax benefits missed by current tax reform deliberations.

Proponents of the Work Opportunity Tax Credit (WOTC) have been urging Congress to expand WOTC Target Groups and to make the program permanent. A 2017 tax extenders bill would provide one more potential means to those ends.

President Promptly Signs Government Funding and Tax Extenders Legislation – WOTC Survives through 2019

President Obama signed a huge tax and spending package into law on Friday following congressional votes that avoided a year-end showdown over the budget and ended legislative business until lawmakers return in 2016

Empowerment zones were reauthorized only through 2016.  Interestingly, however, the bill included a provision that expanded empowerment-zone benefits into some census tracts outside of actual zone boundaries.

It’s not yet clear to me if this empowerment-zone expansion will also affect WOTC’s Designated Community Resident target group.

Read about it in USA Today: “President Obama signs massive spending bill, tax measures into law.”

 

Extenders and Funding Bills Passed by House and Senate

The tax extenders and government funding legislation passed the House and Senate today and is now on its way to the President for his pen.  Of primary interest to WOTC Planet readers is the 5-year extension of the Work Opportunity Tax Credit (WOTC) with Vow to Hire Heroes Act.  These will become law upon receiving the President’s signature.

From USA Today, “Senate clears massive spending bill, tax measures“.

You can read the bill here, at least until they move the file.  For the WOTC extension and revision, scroll to page 38 of the PDF.

Under the 5-year extension, WOTC will be expanded to include a new target group, “Long Term Unemployment Recipients.”  Here’s the language from the bill:

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 is not less than 27 consecutive weeks, and includes a period in which the individual was receiving unemployment compensation under State or Federal law.

Based on this language alone (no IRS interpretation available yet), my understanding is that a new employee must be unemployed at the time of hire and the condition of unemployment must have existed for at least the last 27 weeks (which equals one week more than 6 months).  At some point during that 27-week period, the new hire must have received unemployment insurance compensation.

I won’t be surprised if the IRS interprets this to permit one or more short periods of inconsequential employment during the 27-week period (similar to the HIRE Act which required 60 consecutive days of unemployment but still allowed up to 40 hours of work during that period). BUT, that’s just me hoping out loud.

After the President signs this legislation, we anticipate the IRS will issue a notice providing transition relief for employers that did not file timely WOTC application during the program’s 12-month hiatus.

We’re Still Waiting – Tax Extenders Omitted from the Two-Year Budget Deal

I’m sorry, I should have posted this sooner.

The Bipartisan Budget Agreement of 2015 as worked out by Speaker Boehner and other leaders this week does not include WOTC or other tax extenders. The extenders will likely become a priority for the new Speaker in coming days. They most certainly ARE a priority for tens of thousands of businesses and tax payers, all of whom have their eyes on Congress this week.

Tax Extenders Almost Here?

Leaders are closing in on a budget. Word has it that we might get news about tax extenders after tonight’s meeting of House Republicans.  Speaker Boehner is trying to wrap up business before vacating his seat on Thursday.

See:

Congressional leaders and White House closing in on a budget deal

Congress and White House Near Deal on Budget

Congress, White House close to releasing two-year budget agreement

 

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.

WOTC EXTENDED Through End of December

On Friday Pres. Obama signed HR 5771, the Tax Increase Prevention Act of 2014 into law.  While  employers can be glad their efforts to utilize the Work Opportunity Tax Credit and other tax incentives during 2014 were not wasted, we are now faced with a new expiration date approaching in only 12 days.

Paul Suplizio, President of the WOTC Coalition, summarizes our situation and defines our next objective.

We share your disappointment at Congress’ inability to provide more than a one-year extension, which means continued uncertainty for taxpayers who rely on these tax credits in good faith with the aim they were enacted for.

Our immediate goal is to win a WOTC extension for the entire year 2015 on the bill to raise the debt ceiling which will come before Ways and Means in March. If another tax bill moves sooner, for example, raising the gas tax for highway maintenance, we will work to get WOTC included in that bill.

More to follow….

WOTC for 2014 Only – If We Can Get It.

Last night the House of Representatives passed a massive $1 trillion spending bill, after which House members began skipping town. Unfortunately, the spending bill was viewed as the final hurtle to jump on members’ way to Christmas vacation.

With the House no longer in session, the Senate is left with the option of passing HR 5771 (tax extenders) as it was originally delivered by the House or simply letting it die. Amendments to the bill would require it to go back to the House for approval but that is no longer an option.

If passed by the Senate, HR 5771 will extend WOTC and other tax-extender programs retroactively for 2014 only.  Businesses that relied upon these programs in 2014 would be rewarded for their faithfulness. We are placed on notice, however, that the tax provisions will expire again in less than three weeks.

When Congress convenes again in 2015 it will be with new leadership, with new directives controlled by a new Republican majority in both houses.  Big changes to the tax code have been promised.  If we can rely upon the conversations of 2014, each tax extender will be evaluated on its merits either to be made permanent or to be eliminated.

 

Below you will find last night’s observations from Paul Suplizio, President of the WOTC Coalition.  We published them here with permission.

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From: “Paul Suplizio” <wotc@cox.net>
Date: Thu, December 11, 2014 8:35 pm
Subject: House Passes Omnibus/Senate Plans To Pass Tax Extenders Tomorrow

December 11, 2014
10:10 PM

The House passed the Omnibus 219-206 removing the last obstacle to final adjournment of the 113th Congress. Members are already on their way home.

As predicted, 58 strong conservative Republicans voted against the bill, but 38 Democrats voted with 181 Republicans to make a bare majority.

House adjournment leaves the Senate with no alternative but to pass the tax extenders bill received from the House, H.R. 5771, with a one year extension of current-law WOTC and VOW To Hire Heroes Act veterans tax credits for 2014.

The ABLE Act authorizing tax-free savings accounts for people with disabilities is part of H.R. 5771.

While Senate passage is 99 percent assured, any senator can hold up action on the Omnibus and tax extenders, requiring the Majority Leader to file cloture delaying action for 30 hours of debate.

Normally, comity prevails in the closing hours so the Senate should finish business tomorrow.

If the Senate passes H.R. 5771 tomorrow, the effective date of the Act will be the date the President signs it into law. As IRS is in a hurry, it shouldn’t be long coming but might take a week.

PAUL E SUPLIZIO
President, WOTC Coalition

 

Senate Action on Extenders Anticipated Wednesday and Thursday

Tonight, I am passing along observations from Paul Suplizio about the US Senate’s progress towards a tax-extenders bill.  Additional action on the floor is anticipated by Thursday.  So far, however, Democrat and Republican Senate Leaders have not revealed the nature of any agreements they might have reached.

The following is published here with permission.

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From: “Paul Suplizio” <wotc@cox.net>
Date: Mon, December 08, 2014 6:50 pm
Subject: Tax Extenders Bill H.R. 5771 Set For Senate Action

December 8, 2014

Senate Majority Leader Harry Reid called up H.R. 5771 for its first reading tonight, a step preparatory to bringing the bill to a vote.

Senators Reid and McConnell aren’t saying whether they’ve been able to put a deal together to cover 2015. Whatever they’ve decided, it’s likely they’ll ask their caucuses for the green light at their regular meeting tomorrow.

One of their tasks is to resolve changes other senators want to make to the bill; if they’re successful, H.R. 5771 can pass by unanimous consent tomorrow.

If unanimous consent is blocked, Reid has several options but it’s likely the bill (amended or not amended) won’t pass till Thursday.

We will keep you informed.

PAUL E SUPLZIO
President, WOTC Coalition