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WOTC Legislative Update Sept 2019

By Teresa Danielson

In May, Senate Finance Committee Chairman Chuck Grassley (R-IA) assigned Finance Committee members to a series of taskforces to review the various expired and expiring tax provisions collectively known as “extenders.” The Employment and Community Development Taskforce released its report on August 27.

According to the report’s introduction, “The taskforce worked with stakeholders, other interested Senate offices, and other interested parties to examine the original basis of each provision, determine whether there continues to be a need for the provision s currently drafted, and identify long-term resolutions.” Among the provisions considered by the taskforce were the Work Opportunity Tax Credit, The New Markets Tax Credit (NMTC), the empowerment zone tax incentives, and the Indian Employment Credit.

The taskforce’s specific recommendations were limited to just three points:

  1. Any extension of the six tax provisions should be considered with a permanent or long-term time horizon.
  2. To the extent congress chooses to extend the Indian Employment Credit, they “should eliminate the current law base year for measuring the credit amount and instead measure the credit using a moving average of qualified wages and health insurance costs from a set number of preceding years.”
  3. Move the language related to the American Samoa credit into the Internal Revenue Code.

Among the provisions examined by the Employment and Community Development Taskforce, WOTC has by far the most support. Comments were made by two Senators to enhance and expand the WOTC target groups. At the time of the report, 16 separate bills have been introduced to extend or otherwise expand the program, far more than have been introduced for the other provisions. Of the 100 written comments sent to taskforce, 65 were related to WOTC, and all 65 expressed support for the program’s extension.

When Congress will act to renew or extend these provision remains unclear. On June 20, the House Ways and Means Committee passed H.R. 3301 extending provisions that expired at the end of 2017 as well as those expiring at the end of 2019 through 2020. This committee passage is just one of many steps toward any final legislation.

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