Recent House and Senate Action on WOTC
SENATE ACTION ON WOTC EXTENSION:
During the Week of June 16, NEON filed its comments to the Senate Finance Committee's tax extender's Task Force on Employment and Community Development. NEON testified before the Task Force and emphasized WOTC's public assistance savings, employer acceptance of the program, the flexibility of the WOTC platform, program growth as a result of the five year PATH Act extension, and the need for a seamless permanent extension. We also discussed program improvements with an emphasis on the positive impact of lifting the age ceiling on WOTC eligibility for SNAP recipients. In addition, we referenced bills that have been introduced that would make eligible Transitional Foster Care Youth, S. 1651 and those on Social Security Disability Insurance, S. 255.
The Task Force was quite supportive of WOTC. We were asked about our savings estimates and why we don't get credit for them. We referenced our meeting between Dr. Cappelli and the head of the Joint Committee on Taxation during which we were told that they believe the program more than pays for itself. However, the Joint Committee recommended we speak with the Congressional Budget Office since the Joint Committee on Taxation only estimates the impact on revenues of changes to the tax law, and not the impact on spending programs. We explained that CBO can only estimate total annual program costs, but not how a program like WOTC impacts those costs.
SENATE APPROPRIATIONS FUNDING INCREASE FOR WOTC ADMINISTRATION:
NEON was instrumental in securing $2M increase in WOTC administrative funding in the draft Senate Labor HHS Bill that was released September 18th, 2019. NEON will work with the conferees to secure the House level of funding for WOTC.
HOUSE ACTION ON WOTC EXTENSION:
On Thursday, June 20, the House Ways and Means Committee Reported H.R. 3301, The Tax Payer Certainty and Disaster Relief Act of 2019 which would:
Seamlessly extend WOTC through 2020, and retroactively extends through 2020 the Indian Employment Credit and Empowerment Zone hiring and provide Disaster Tax Relief which would include an employee retention credit for all 2018 and 2019 federally declared disaster areas through 60 days after the date of enactment.
During the Committee's consideration of H.R. 3301, Congressmen/woman Bill Pascrell (D-NJ), Danny Davis (D-IL), Terri Sewell (D-AL), Dwight Evans (D-PA), and Steven Horsford (D-NV) all spoke in support of WOTC.
HOUSE APPROPRIATIONS FUNDING INCREASE FOR WOTC ADMINISTRATION:
NEON was also instrumental in securing a $2.5M increase in WOTC administrative funding in the Labor HHS portion of the House passed Defense, the State Department, Energy and Water Development, and Labor, HHS spending bills, H.R. 2740. This would bring total administrative dollars for processing WOTC claims up to $22.3 M, a 12.6% increase which is more than the across the board 10% increase given to DOL. We are working with the Senate Labor HHS Subcommittee to secure a similar increase in the Senate bill.
Tax Extenders for 2017, 2018 and Disaster Relief Retention Credit:
Congress continues to work on moving a tax extenders package for provisions that expired in 2017 and 2018 (Indian Employment Credit and Empowerment Zones) as well as Disaster Tax Relief, including a retention credit for employers located in communities that have been impacted by 2018 hurricanes, wildfires, and mudslides.
WOTC PERMANENCY BILLS INTRODUCED
IN THE SENATE AND HOUSE
WOTC Permanency Bills:
On April 2nd, 2019, Senators Rob Portman (R-OH) and Ben Cardin (D-MD) along with Senators Roy Blunt (R-MO), Sherrod Brown (D-OH), Bill Cassidy (R-LA) and Bob Menendez (D-NJ) introduced "The Work Opportunity and Jobs Act", S.978, which would make WOTC permanent. This was followed on April 10th, 2019, by Congressman Mike Thompson (D-CA) and Tom Reed (R-NY), along with Congressman Bill Pascrell (D-NY), Tom Rice (R-SC) and Tom Suozzi (D-NY), introducing H.R. 2213, which would also make WOTC permanent. The Senate and House Bills and Press Releases from when the bills were introduced can be found below:
Employment and Community Development Task Force Report
The Finance Committee released its Tax Extenders Employment and Community Development Task Force Report in August 2019 which includes a discussion on WOTC, the Indian Employment Tax Credit and Empowerment Zones, all of which provide hiring tax incentives.
The five provisions they looked at were:
- New Markets Credit
- Empowerment Zones
- Indian Employment Credit
- Mine Rescue Team Training Tax Credit
- American Samoa Economic Development Credit
The central recommendation of the Task Force for the provisions they considered is that “Tax policy should be enacted with long-term horizons if not on a permanent basis.”
They also recommended some prospective changes to the Indian Employment Credit that would "measure the credit using a moving average of qualified wages and health insurance costs from a set number of preceding years.” This is designed to make the credit fulfill its mission of being an incremental hiring incentive.
Regarding WOTC, the report points out a number of very positive comments that they received from stakeholders:
- Sixty five public comments were submitted on WOTC.
- All comments were positive and supported a permanent extension.
- The report cited three of the main program expansion recommendation that NEON made during the presentation to the Task Force:
- WOTC should be made permanent
- The current age ceiling on SNAP eligibility of 40 should be lifted/eliminated
- A new category should be added for Opportunity Zones that would provide an enhanced tax credit for those who live and work in Opportunity Zones
- Sixteen bills have been introduced in the House and/or Senate on WOTC – all calling for expansions of the program. This is significantly more than any other provision considered.
- Two Senators submitted comments:
- Bob Casey (D-PA) in support of his bill to expand WOTC to include SSI Disability recipients.
- Dick Durbin (D-IL) in support of his bill to expand WOTC to include youth who have dropped out of school.
While no negative comments were submitted regarding WOTC, there were comments submitted that called for the repeal of the Indian Employment Credit, Empowerment Zones, and New Markets.
The Task Force report should be viewed as a positive and will support the contention that there should be a permanent if not multi-year extension of the program.
To view the entire report, click here
Entities supporting WOTC
U.S. Chamber of Commerce
Retail Industry Leaders Association
Buffalo Wild Wings
Associated General Contractors of America
American Staffing Association
Citizens United for Rehabilitation of Errants (CURE)
Goodwill Industries International, Inc.
Paralyzed Veterans of America
Partners for Rural America
Legal Action Center
National Grocers Association
National HIRE Network
National Employment Opportunity Network
National Puerto Rican Chamber of Commerce
National Restaurant Association
Retail Industry Leaders Association
Society for Human Resource Management