A bipartisan group of Senate lawmakers has introduced legislation to make the Work Opportunity Tax Credit a permanent part of the Tax Code.
The WOTC offers employers a tax credit of between $1,200 and $9,600 per employee if they hire and retain workers who belong to some targeted groups representing populations that have a hard time finding work, or are often out of the labor force altogether. The credit amount is based on the qualified wages paid to employees within the targeted groups. They include veterans, ex-felons, disabled people, the long-term unemployed, summer youth employees, along with recipients of government aid programs such as Temporary Assistance for Needy Families, Supplemental Security Income and the Supplemental Nutrition Assistance Program.
The stimulus package that Congress passed in December extended the Work Opportunity Tax Credit through the end of 2025, among a number of other tax extender provisions. The program has long enjoyed bipartisan support as it incentivizes employers to provide jobs to people who would be dependent on government assistance.
“Because of the ongoing COVID-19 pandemic, now more than ever individuals who are in the shadows are struggling to find meaningful employment,” said Sen. Rob Portman, R-Ohio, in a statement Monday. “Encouraging employers to hire those who have the most trouble finding work is good policy, and while securing a five-year extension last year was a positive step, it’s critical that we make the Work Opportunity Tax Credit permanent.”
Co-sponsors of the bill include Sen. Ben Cardin, D-Maryland, Roy Blunt, R-Missouri, Sherrod Brown, D-Ohio, Bill Cassidy, R-Louisiana, and Bob Menendez, D-New Jersey. Cardin pointed out that making the program permanent would provide more certainty to employers.
The bill has received support from the Retail Industry Leaders Association and the National Employment Opportunity Network, which estimated that the tax credit has helped more than 30 million people on public assistance programs transition into the workforce in the past 35 years, saving federal and state governments over $20 billion a year in expenditures on TANF, SNAF, federal housing and Medicaid.
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