The Senate Finance Committee today passed a tax extenders package that would extend the Work Opportunity Tax Credit for two years through December of 2016 and an amendment in committee would expand the coverage to include individuals who have exhausted unemployment compensation. A summary of the Chairman’s amendment is available at http://www.finance.senate.gov/imo/media/doc/JCX-103-15%20%20Chairman’s%20Modification.pdf . The expansion to include UI exhaustees is described as
- Modification of work opportunity tax credit
The Chairman’s modification extends the work opportunity tax credit to employers who hire individuals who have exhausted regular compensation benefits under State and Federal unemployment compensation laws. With respect to wages paid to such individuals, employers would be eligible for a 40 percent credit on the first $6,000 of wages paid to such individual, for a maximum credit of $2,400 per eligible employee.to be hired by employers.
UWC worked with staff from Senator Portman and Senator Cardin’s offices to improve the language that was included in the EXPIRE Act last Congress to expand coverage to long term unemployed but define the group using definitions that fit systems that are already in place. The new amendment language would make the certification process easier for state agencies and employers.
The passage of the tax extenders bill by the Finance Committee is an important step. House legislation so far has not addressed the various tax extenders in a comprehensive bill, and it is not certain that the expansion of WOTC will be included in the final package.
UWC supports WOTC as a tool available to employers to reduce the cost of hiring employees while enabling unemployed workers to rejoin the workforce. If there is a decision to expand WOTC coverage, we are working to make the administration of the expansion as simple as possible for employers and state agencies.