WOTC Enhancements for COVID Recovery in Ways and Means Proposal

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Congressional committees have been hammering out the details of the “Build Back Better Act,” the $3.5 trillion reconciliation bill which is a priority of the Biden administration. The House Ways and Means Committee is in the middle of its “Markup” process to come up with the specific tax policy that would be included in the legislation.

On September 12, the Committee released some of its proposed legislative language. Among the proposals is Section 138513, “Enhancement of Work Opportunity Credit During COVID-19 Recovery Period.” This proposal comes from H.R. 3449 and has been previously discussed here. The version that has made it into the markup would:

  • Eliminate the restriction against claiming WOTC for rehired employees,
  • Increase the amount of tax credit from 40% of $6,000 in qualified wages to 50% of $10,000, and
  • Provide a similar credit for the second year of employment of qualified employees.

 

These enhanced features would be available for qualified new hires or rehires hired after the bill is enacted and before January 1, 2023.

There remain many procedural hurdles before this proposal has the chance of becoming law, but its appearance in the Ways and Means markup is a significant step.

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