U.S. Rep. Lloyd Smucker (R-PA) introduced legislation that seeks to strengthen and extend the Work Opportunity Tax Credit (WOTC).
The WOTC, which helps disadvantaged individuals secure employment, is set to expire at the end of this year without congressional action.
Specifically, the WOTC provides a federal tax credit to employers who invest in workers who have consistently faced barriers to employment, including eligible veterans, SNAP recipients, individuals with disabilities, and long-term unemployed individuals.
The Improve and Enhance the Work Opportunity Tax Credit Act would update the WOTC, which has not been changed since its enactment 27 years ago, and encourage. Specifically, it would:
- Increase the current credit percentage from 40 percent to 50 percent of qualified wages.
- Incentivize employee retention by expanding the credit for those who work 400 or more hours.
- Eliminate the arbitrary age cap at which SNAP recipients are eligible for WOTC. This change will provide an incentive to hire older workers and better align the credit with previously adopted work reforms.
- Extend the credit for 5 years.
- Expand eligibility to military spouses.
- Index the credit to inflation.
“The best anti-poverty program is a good job,” Smuck said. “The Work Opportunity Tax Credit (WOTC) helps both employers and workers, as individuals transition back into the workforce. I remain dedicated to helping disadvantaged Americans return to work by advancing legislation that strengthens this proven tool. WOTC is a bipartisan, commonsense approach that every Member of Congress should champion.”
Companion legislation was introduced in the U.S. Senate by Sens. Bill Cassidy (R-LA), John Boozman (R-AR), Roger Marshall (R-KS), Jerry Moran (R-KS), Jim Justice (R-WV), Tim Kaine (D-VA), Maggie Hassan (D-NH), Catherine Cortez Masto (D-NV), and Peter Welch (D-VT).
“Veterans and military spouses deserve every opportunity to build stable, rewarding careers,” Cassidy said. “By reducing the burden on employers who hire them and other individuals who have fallen through the cracks, we strengthen our economy and give people the chance they need.”
The National Employment Opportunity Network said the WOTC has saved the federal government an estimated $202 billion over 10 years. Further, the legislation is estimated to directly support 350,000 new jobs, generating $3.7 billion in labor income and contributing $5.6 billion to GDP, according to EY.