June 6, 2019 – On April 2, Senate Bill 978 was introduced with bi-partisan support by a group of five Senators: Rob Portman (R-OH),Senator Ben Cardin (D-MD), Roy Blunt (R-MO), Sherrod Brown (D-OH), and Robert Menendez (D-NJ) to make the Work Opportunity Tax Credit (WOTC) permanent.
On April 11, a parallel bill, H.R. 2213, was introduced in the House by a bi-partisan group of Ways and Means Committee Members. Mike Thompson (D-CA), Chairman of the Select Revenue Subcommittee which oversees “tax extender” programs such as WOTC, is the lead sponsor. Co-sponsors include Tom Reed (R-NY), Bill Pascrell (D-NJ), Tom Rice (R-SC), Tom Suozzi (D-NY), and Carol Miller (R-WV).
Members of Congress continue to propose additional enhancements to WOTC. For example, on May 2, Representative Susie Lee (D-NV) introduced H.R. 2499, to add veterans who are receiving educational assistance under laws administered by the Secretary of Veterans Affairs or Defense as a new target group.
This month the Senate Finance Committee Chairman Chuck Grassley set up five task forces to examine 42 expiring tax provisions which expired or will expire between December 31, 2017 and December 31, 2019 . The bipartisan task forces will conclude by the end of June. There is also another task working to decide whether Congress should move forward with permanent proposals to provide relief for taxpayers hit by natural disasters.
NEON representatives have met with over 150 legislator offices since the 2018 election. The common theme of these meetings as been a consistent, bi-partisan recognition of the success and importance of WOTC. The two permanency bills introduced this month are perhaps the highest profile show of support from legislators in the program’s history.
Last year, we reported on California Assembly Bill 916 which would have created a CA WOTC state income tax credit. This year, Assemblymember Sabrina Cervantes, Chair of the Committee on Jobs, Economic Development, and the Economy, introduced AB 1726 which revived the CalWOTC proposal. While the bill passed the JEDE and Revenue and Taxation Committees, it was held in suspense by the Assembly Appropriations Committee in the coming weeks. Efforts are continuing to include the legislation in the upcoming budget negotiations.
The CalWOTC proposal would create a California income tax credit for taxpayers who obtain a certificate under the federal WOTC (excluding the Designated Community Resident, Summer Youth, and Short-Term Unemployed Veteran target groups). The minimum retention period is 500 hours, and only wages beyond $5,000 are factored into the maximum $2,400 credit.
NEON is continuing to advocate the renewal of the Federal Empowerment Zones and Indian Employment Credit which expired at the end of 2017, as well as the disaster retention credits which provides support for those affected by the disasters in 2018. We will continue to monitor the progress and will share new information as it becomes available.