WOTC and Other Tax Extenders Must Wait
The House – Senate Conference has come to an agreement on what is now dubbed The Middle Class Tax Relief and Job Creation Act of 2012. Expectations are high that both the House and Senate will quickly pass the bill. President Obama has already indicated he will sign the bill.
Unfortunately, the tax extenders, including the general WOTC extension, were completely excluded from this legislation. All WOTC categories except for those favoring military veterans must now wait to be extended by another yet future tax bill.
As I’ve summarized before, this situation is not unusual for the Work Opportunity Tax Credit (WOTC) program. Of the eight times Congress has acted to renew or extend the WOTC program, three were passed retroactively months after the program’s legislative authority had expired.
- The first was in March 2002 after WOTC expired on December 31, 2001.
- The second was in October 2004, about ten months after WOTC expired on December 31, 2003.
- The worst example to date was in December 2006, when the program was reauthorized almost 12 months after its expiration.
In each of these events, the renewal was made effective retroactively back to the date of expiration. In other words, employers were eligible to claim tax credits generated by properly certified employees hired between the expiration date and the date the WOTC program was renewed.
We continue to anticipate a similar re-authorization in 2012. For this reason, my firm will continue to process and submit WOTC applications under all employee-eligibility categories — not just for veterans.
As employers consider their strategy for 2012, they should remember that even though a general extension has not yet been passed, eligibility-categories for hiring military veterans are already authorized through 2012 by the VOW to Hire Heroes Act of 2011. The amount of tax credit currently offered for hiring unemployed veterans goes as high as $9,600 per qualifying hire.
This is an excellent opportunity to more affirmatively recruit veterans for your workforce.
- Published in Work Opportunity Tax Credit
Senators Baucus and Reid — Tax Extenders Should Be Included In Payroll Tax Cut Deal
Negotiations are on again to extend the 2011 payroll tax cut until the end of 2012. The House-Senate Conference met on Tuesday — the first time this year — and the road to an agreement appears rocky. Optimism is alive – but there are also some big disagreements to sort through.
Both sides of the discussion agree that a deal must be made before the end of February when the current 2-month extension expires. (more…)
- Published in Federal Legislation, Work Opportunity Tax Credit
HR 2082 – Bill to Extend and Refine the Work Opportunity Tax Credit Program
I received an update from Paul Suplizio, President of the WOTC Coalition today. There is recent progress on the legislative front for an extension of the Work Opportunity Tax Credit.
The WOTC program is currently slated to expire on December 31, 2011. While that might at first seem alarming if your company has been relying on the program to offset hiring costs, its par for the WOTC game. Over the years, Congress has repeatedly allowed the program to expire or nearly expire before renewing it for another term. (more…)
- Published in Federal Legislation, Work Opportunity Tax Credit