United States Representative State Cohen (Democrat from Tennessee) and Senator Jon Ossoff (Democrat from Georgia) recently introduced a bill within their respective houses, encouraging the opening of new grocery stores in “underserved areas.” The legislation would provide tax new incentives for grocers that offer consumers fresh fruits, vegetables, meat, and dairy in those areas.
Read more: Fresh Food Act of 2024 Would Increase the Value of WOTC for Some GrocersThe Fresh Food Act’s tax reductions are potentially three-fold. It includes a tax credit based on the business’ wholesale cost of qualifying fresh-food products, such as fruits, vegetables, meat and dairy. It would offer an additional tax incentive to grocers who source those products locally. Of most interest to us, however, is the bill’s proposal for increasing the Work Opportunity Tax Credit (WOTC).
The WOTC tax credit amount is calculated based on an amount of qualified wages as specified by the US Tax Code. The maximum amount of wage used in that calculation varies for each employee, depending on why the employee qualified for WOTC. For most WOTC-certified employees, the maximum qualified wage is $6,000. For certain qualifying military veterans, the maximum qualified wage is $12,000, $14,000 or $24,000 — again depending on the circumstances that qualified the veteran.
The Fresh Food Act of 2024 would increase by $1,000 the maximum qualifying first-year wage for each category. Since the tax credit is calculated as 40 percent of the qualifying first-year wage, this amounts to an increase of $400 in tax credit per qualifying hire. Of note, the increase in qualified wage would not affect WOTC Target Group I (long term family assistance recipients).
The increased WOTC benefit would be applicable to wages paid during taxable years that begin between the dates January 1, 2025, and December 31, 2030, inclusive.
Click here to read the text of this bill.
For Senator Ossoff’s “one pager” summarizing the proposal, click here.
