Senate Finance Committee Votes to Extend Work Opportunity Tax Credit (WOTC) and Adds Long Term Unemployed to Groups for Credit

By voice vote on April 3rd the Senate Finance Committee approved an amended version of the Expiring Provisions Improvement Reform and Efficiency (EXPIRE) Act of 2014. See  One amendment included in the bill by Chairman Wyden would expand WOTC to provide a credit to employers hiring the long term unemployed. A description of the proposal by the committee staff is provided below

Modification of work opportunity tax credit (sec. 51 of the Code)

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.

The Chairman’s modification provides that for purposes of the work opportunity tax credit, the term “empowerment zone” as used in that section shall refer to empowerment zones designated as such under section 1391 of the Code as of December 31, 2013.

The modification is estimated to cost $305 million over 10 years, and the provision as a whole is estimated to cost $3.16 billion.

The EXPIRE Act is not yet scheduled for a vote on the Senate floor, but could be taken up when the Senate returns.