Tax Reform Proposal to Repeal WOTC

You’re probably already aware of the House’s tax reform proposal, which in it’s current form would repeal the Work Opportunity Tax Credit (WOTC) program. Repeal would be effective 01/01/2018.  The draft reform bill was introduced 7 days ago as H.R. Bill 1, the Tax Cut and Jobs Act.

The repeal of WOTC as proposed is wholesale and complete.  Here’s the text in its entirety:

SEC. 3404. REPEAL OF WORK OPPORTUNITY TAX CREDIT.
(a) In General.—Subpart F of part IV of subchapter A of chapter 1 is amended by striking section 51 (and by striking the item relating to such section in the table of sections for such subpart).

(b) Clerical Amendment.—The heading of such subpart F (and the item relating to such subpart in the table of subparts for part IV of subchapter A of chapter 1) are each amended by striking “Rules for Computing Work Opportunity Credit” and inserting “Special Rules”.

(c) Effective Date.—The amendments made by this section shall apply to amounts paid or incurred to individuals who begin work for the employer after December 31, 2017.

After one week, no effort to remove or amend this provision has so far gained significant traction.  In addition to NEON, The WOTC Coalition, and other more specific interest groups, many individuals are also reaching out to their members in the House and Senate.

If you or your organization are involved in this effort, please let me know.

Deadlines Looming, WOTC Coalition Asks Treasury Department to Extend Transition Relief for 90 More Days

Paul Suplizio, President of the the Work Opportunity Tax Credit Coalition has authored an official letter to the Department of Treasury urging the Department to extend the time period granted for WOTC applications under Transition Relief.

IRS Notice 2016-22 provides Transition Relief for employers needing more time to process WOTC applications for employees hired in 2015 and early 2016.  This relief was necessary because of Congress’ long delay in reauthorizing the WOTC program after it expired on December 31, 2014.

Congress passed legislation on December 18, 2015 to reauthorize WOTC for 5 years, including retroactively 1 year to cover 2015.

Under the regular rules, employers face a 28-day deadline to submit a WOTC application for an employee who qualified at their time of hire. Transition Relief, as currently offered by the IRS, extends the application deadline to June 29, 2016 for all eligible employees hired from January 1, 2015 through May 31, 2016.  The WOTC Coalition is asking the Treasury Department to extend the June 29 deadline by another 90 days.

Why? WOTC employers still face a major problem.  The Department of Labor has not yet issued the revised application forms and the official guidance employers need in order to comply with the newest provision of the WOTC tax code.

State workforce agencies that receive the applications and issue certificates for qualifying employers also face challenges. Until the new forms and guidance are issued, they can not update the software systems and online webforms that support the application and certification process.  Agencies in many states are asking employers to delay submitting their applications until the updates and revisions can be made.

Even if the Department of Labor issued the anticipated forms and guidance today, many state workforce agencies would be hard pressed to complete their internal system updates in time for employers to submit all their WOTC applications before the June 29 deadline.

 

WOTC Transition Relief and Forms Update – Almost There

Paul Suplizio, President of the Work Opportunity Tax Credit Coalition, announced this morning that the IRS has released Notice 2016-22 providing for WOTC Transition Relief. I believe Paul but so far, I am unable to find the documents online.  Perhaps they’ll show up later today.

As soon as the nitty-gritty details come to light, you’ll be the first to know.

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

Call Your US Senators NOW!

Today, the U.S. House of Representatives is expected to vote on (and pass) HR 5771– the Tax Increase Prevention Act of 2014.  This will be Congress’ first solid step in some time toward passage of tax extenders.  HOWEVER, in its current form the bill’s provisions fall short of expectations.

HR 5771 provides for a ONE-YEAR retroactive extension.  That means that if the bill were also passed by the Senate without amendment, WOTC and other tax extenders would expire again on December 31, 2014 – just 28 days from now.

Fortunately, the Senate already has shown broad bipartisan support for the EXPIRE Act, which provides a 2-year retroactive extension.  The EXPIRE Act additionally would expand WOTC eligibility to include workers who have been unemployed long-term.

Paul Suplizio, President of the WOTC Coalition, is urging coalition members and other interested parties to lobby their Senators.  Ask them to amend HR 5771 with the language of the EXPIRE Act when the bill arrives from the House.

The following is published here with permission:
 

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From: “Paul Suplizio” <wotc@cox.net>
Subject: House To Vote This Afternoon On Tax Extenders And ABLE Act

December 3, 2014

The House will vote this afternoon on passage of H.R. 5771, the Tax Increase Prevention Act of 2014, and H.R. 647, the ABLE Act of 2014.

H.R. 5771 extends expired tax provisions, including present-law WOTC, VOW To Hire Heroes Act veterans tax credits, Empowerment Zone tax credits, and the Indian Employment Tax Credit, for 2014 retroactive to January 1.

H.R. 647, the ABLE Act of 2014, provides tax-free savings accounts for people with disabilities, and allows them to work without losing certain benefits.

Both bills enjoy bi-partisan support and passage is expected.

Under the Rule, the text of H.R. 647 will be added to that of H.R. 5771 after passage—see House Report 113-643, p.2 at the Rules Committee web site, www.rules.house.gov.  Thus, the two bills will be combined and sent to the Senate as a single bill, H.R. 5771, upon passage in the House.

Right now we should be lobbying our senators to amend H.R. 5771 with the text of the Senate’s bi-partisan EXPIRE Act, when H.R. 5771 comes over from the House.  This would provide a two-year, retroactive extension through 2015 of all expired tax provisions, with WOTC expanded to include long-term unemployed workers.

We understand disability advocates will be working for improvements to the House version of the ABLE Act.  Any improvements could be included in the Senate amendment to H.R. 5771.

PAUL E SUPLIZIO
President, WOTC Coalition

House Republicans will Determine WOTC Future – State-by-State Lobbying Plan

If you have been following WOTC in the news lately, there hasn’t been much to follow.  The political process has been occupied elsewhere.  You might, however, have notice a few interesting odds and ends.

For example, ADP has a new mobile tool for WOTC screening.”  Click here.

Max Shenker of The EZ Policy Blog has also passed along a few interesting WOTC-related stories.

 “The National Association of State Budget Officers (NASBO) is highlighting a new study from an economist with the Wharton School of business showing that states collectively save $1.7 billion a year because of WOTC.”  Here.

Senator Hatch (Republican of Utah) predicts that tax-extenders will pass during the lame-duck session after the November 4 elections.

“[M]ake no mistake, Republicans want to pass this legislation. We know how important these extenders are to the business community. We’re going to get it done. I’m confident that it will pass, likely during the lame duck session after the midterms.”

And, the “IRS Wants Extenders Passed With Minimal Changes” in order to minimize potential complications for the upcoming 2015 tax-filing season.

Each of these items is uplifting in its own WOTC-sort-of way.

If you want to actually do something about passing a WOTC extension, Paul Suplizio of the WOTC Coalition offers some specific direction today.  The following is published here with permision.

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From: “Paul Suplizio” <wotc@cox.net>
Date: Mon, October 06, 2014 7:56 am
Subject: WOTC Coalition Lobbying During Election Period 

Every member of the House not retiring will be campaigning at home for re-election this month, the best time to visit and get their attention.

Attached is our state-by-state target list for lobbying House Republicans during the election period. We’ve included senators you’ll need to lobby as well, but give priority to House Republicans because they’ll determine the future of WOTC.

We cannot win a temporary extension after the election, or permanent extension in the tax reform bill to be written in the new Congress, without support of the Republican-controlled House.

In every state our Coalition has members who know how to be effective, and you are the people congressmen have a duty to listen to when you have a legislative interest. They will be home the entire month so go around to see them in their district office or at town meetings and campaign events and make the case for WOTC.

Start with your own congressman if he or she is a Republican—you don’t need to look at the lobbying plan for their name—you know who they are.

If you are a firm or organization that operates statewide, go to the target list for your state and make an effort to see those congressmen on the list.

If you are a firm or organization with branches or operations in more than one state, start with the state where you are headquartered, then work on the target list for states where you have a significant presence. So long as your organization has an impact on people in the district, you can represent their interest when speaking to their congressman.

Here’s the type message to deliver in your own words:

“We are concerned because Congress has yet to act on a tax extenders bill renewing programs like the work opportunity tax credit that have expired. Many of these programs have been part of the tax code for two or three decades, like WOTC, and Congress has always renewed them retroactively when they expire. But this year only the Senate has taken up and approved a bi-partisan bill on a first vote of 95-3. The House has passed bills for tax measures to be included in future tax reform, but has done nothing on the most immediate need—a bill to renew WOTC and other expired provisions.”

“A tax reform bill isn’t around the corner—it’s going to take all of next year and perhaps longer to finish. In the meantime, the tax filing season is almost here and the House, which has the constitutional duty to initiate revenue measures, has so far done nothing. This defeats the purpose of WOTC which is to help veterans, the disabled, the homeless, long-term unemployed, at-risk youth, low-income seniors, ex-felons, welfare and food stamp recipients find jobs and save the government money at the same time.”

“Studies have shown that savings on welfare, food stamps, and lower incarceration alone will more than pay for the entire cost of WOTC. It’s the most cost-effective jobs program because it operates through private sector employers and the government’s cost is capped so employers pay all but around $1,400 of compensation cost for each hire. Will you commit to work with House leaders to make passing an extenders bill that renews WOTC top priority when you return after the election? This is what we are asking and what the Congress needs to get done.”

We’ve enclosed the latest fiscal year 2013 Department of Labor statistics on job placements by target group for each state so you’ll be able to say to what extent your state participates.

We’ll be in touch with you daily to coordinate efforts on primary targets like House leaders and Ways and Means members. We can also answer questions your congressman may raise, and welcome any feedback from your contacts.

PAUL E. SUPLIZIO
President, WOTC Coalition

WOTC Coalition Republican Lobbying Targets For Election Period 2014

WOTC State Statistics For FY 2013

 

Chairman Wyden Amendment Includes EXPIRE Act in Senate Highway Bill

With the support of Republican ranking member, Orin Hatch of Utah, Senate Finance Committee Chairman Senator Ron Wyden of Oregon has presented an amendment to included the EXPIRE Act in the Senate’s highway bill.  The EXPIRE Act would renew the Work Opportunity Tax Credit (WOTC) and dozens of other tax extenders through 2015.

Paul Suplizio of the WOTC Coalition reports this morning that the Senate Finance Committee has adjourned for the Independence Day recess without a vote on the bill.

Between now and when the Senate reconvenes after July 7th, Senators Wyden and Hatch will be seeking a bipartisan agreement on the bill.  According to Mr. Suplizio, the probability is high that EXPIRE will be a part of the bill when it comes before the Senate.

This is not a reason, however, for WOTC supporters to relax.  It remains important to win support from additional Republican senators, whose leadership could still oppose including the extenders in the final bill to be sent to the House of Representatives.

The following is published here with permission.

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From: “Paul Suplizio” <wotc@cox.net>
Date: Thu, June 26, 2014 8:54 am
Subject: Finance Committee Adjourns Highway Markup Without Votes On Any Amendments

June 26, 2014

The Finance Committee has adjourned markup of the Highway bill, subject to call of the chair.

The Committee won’t meet again until after July 7—intervening time will be used by Senator Wyden and Senator Hatch to try to reach bi-partisan agreement on a final measure.

Chairman Wyden said he’s in touch with Ways and Means Chairman Camp on what the House approach will be on any measure sent to them by the Senate.

In view of Senate Democrats announcing their intention via the Wyden Amendment to include EXPIRE in the Highway bill, the odds are high EXPIRE will be in the bill that comes before the Senate.

We will have to continue working hard to win the support of Republican senators because Senator McConnell could make excluding the extenders a condition for his support of the bill. Senator McConnell has spoken in favor of the extenders, but we cannot take for granted what will come out of negotiations between himself and Senator Reid on the bill they’ll send to the House.

PAUL E. SUPLIZIO
President, WOTC Coalition

 

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

EXPIRE Act – Tax Extenders and WOTC Now on their Way in US Senate

Earlier today, the US Senate voted overwhelmingly (96 for, 3 against) to take up HR 3474, the Expiring Provisions Improvement Reform and Efficiency (EXPIRE) Act.

This procedural vote of cloture means that a final vote on the bill may be coming soon.  In the mean time, amendments will be considered and negotiations concluded. We anticipate a vote on the floor of the Senate as early as this week.

Of course, passage by the Senate does not make it law.  It must still pass before the House of Representatives where support is not so dramatic. The overwhelming support for this bill in today’s cloture vote, however, bodes well for a strong passage by the Senate. This unexpectedly high level of support in the Senate may in turn become a persuasive message to our Republican leadership in the House.

The language of this tax extenders bill will renew the Work Opportunity Tax Credit (WOTC) and Empowerment Zone tax incentives (and numerous other programs) through 2015.  It also includes an expansion of WOTC by adding a new target group — the Long-term Unemployment Recipient.  To be precise:

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.

This definition is more restrictive than the original version included in an earlier draft of this bill.  For one, the required length of unemployment is longer – a minimum of 27 instead of 26 weeks.  Moreover, the new employee must have received unemployment compensation benefits at some time during that 27-week period.  Finally, the individual must be currently unemployed at the time of hire and the 27 weeks must be consecutive, leading up to the hire date.

The consecutive-weeks requirement is troubling because it could produce inequitable results for many people. It depends on how strictly the language will be interpreted by the IRS. If the word “unemployed” means no work at all, it would rule out struggling but responsible individuals who have accepted even the most temporary work opportunities.

Consider this in light of the 2010 HIRE Act’s payroll tax exemption. If you recall, the HIRE Act provided a benefit to employers when they hired individuals who had been unemployed for at least 60 days.  Even though the unemployment requirement was much shorter, a person could still have worked up to 40 hours during that period and still be considered unemployed for purposes of the tax benefit.

[This post was updated with minor corrections 05/16/2014]
 

Paul Suplizio, President of the WOTC Association, reported on the Senate’s cloture vote this morning.  The following is published here with permission.

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From: “Paul Suplizio” <wotc@cox.net>
Date: Tue, May 13, 2014 9:47 am
Subject: Senate Votes To Advance Tax Extenders Bill

May 13, 2014

The Senate voted 96-3 today to take up H.R. 3474, the tax extenders bill.

This success is largely due to efforts of new Finance Committee Chairman Ron Wyden and his team for reaching out to every senator to accommodate their interests in the bill. Since the bill was approved by the Finance Committee on April 3rd, Senator Wyden has been actively reaching across the aisle to Republicans to gain their support.

Majority Leader Reid, Minority Leader McConnell, and the bill’s managers, Senator Wyden and Senator Hatch, can now determine which amendments, if any, will be voted on and move to final passage of the bill.

We will be watching for amendments that may impact WOTC—so far there are none, but Senator Coburn, who voted against the bill, has made WOTC a target in the past.

Those of us in touch with Speaker Boehner, Chairman Camp, or others in the House leadership can note the overwhelming vote in the Senate and urge the House to move on the bill when it comes before them.

It’s understood the House will want to make changes—what’s important is that they bring a bill to the floor soon to provide certainty to taxpayers and boost the economy.

The biggest risk at this point is for House Republicans to sit on the bill till after the election because they cannot get the President to agree to something they want, in particular, terminating the medical device tax imposed by the Affordable Care Act. Repealing this tax is a high priority for Republicans and we know it’s one of the amendments Senator Reid is being asked to allow a vote on.

Many thanks to Coalition members who’ve been lobbying Senate Republicans non-stop for two years to get WOTC extended and made permanent in tax reform. The job isn’t finished but you can see your efforts are paying off.

PAUL E. SUPLIZIO
President, WOTC Coalition

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