Legislation would Increase the Amount of the Work Opportunity Tax Credit, a proven tax credit that helps disadvantaged groups find jobs.
Today, Representatives Tom Suozzi (D-NY), Steven Horsford (D-NV), Don Beyer (D-VA), Brad Schneider (D-IL), and Gwen Moore (D-WI) introduced legislation that would increase the amount of the Work Opportunity Tax Credit (WOTC) to help disadvantaged groups who have been hardest hit by the COVID-19 pandemic. Occupations hit the hardest with prolonged unemployment during the COVID-19 pandemic overlap considerably with those most helped by WOTC, including young workers, women, lower-skill workers, and minorities.
Under the legislation, WOTC would be increased to 50% for the first $10,000 in wages, for two years, for all WOTC targeted groups.
“The Work Opportunity Tax Credit is a proven program that has long given veterans and vulnerable Americans the help they need to get back to work. This expansion will make it even better and more effective!” said Congressman Tom Suozzi. “I’m proud to lead this legislation that will help a diverse group of long unemployed individuals find a job. Although the light at the end of the tunnel is getting brighter each day, we need to continue to support workers until we fill every job lost during the pandemic.”
“In Southern Nevada and across the United States, hard-working people are struggling to find good jobs that pay living wages. By temporarily increasing the Work Opportunity Tax Credit (WOTC), Congress can make it easier for employers to bring on new workers and accelerate our economic recovery,” said Congressman Steven Horsford. “I’m glad to sponsor the Hiring Incentive to Return Employment (HIRE) Act of 2021, which will make the largest difference for those hit the hardest by pandemic unemployment, including people of color, young workers, women, people with disabilities, veterans, and underserved communities.”
“This enhancement of the Work Opportunity Tax Credit would help put Americans back to work as the country recovers from the pandemic, and directly assist the long-term unemployed, who were left behind by our economy even before the pandemic began,” said Congressman Don Beyer. “The legislation would modernize this critical program, which has remained relatively unchanged in decades, by expanding the value of the credit over a two year period to maximize the incentive to hire the long-term unemployed, veterans, individuals transitioning off of welfare programs, and other groups. I thank Rep. Suozzi and my other colleagues for their leadership in introducing this important bill.”
“The pandemic has given Americans a wake up call that we have for too long taken advantage of unemployed and frontline workers. Veterans and vulnerable Americans need help getting back to work, and Congress has a chance with the Work Opportunity Tax Credit to give employers the nudge they need to safely bring them back into the workforce,” said Congressman Brad Schneider.
“The Build Back Better approach leaves no one behind – that includes Americans who were vulnerable before the pandemic such as veterans, formerly incarcerated individuals, TANF and SNAP recipients and long-time unemployed. These are people who too often face multiple barriers to employment, including stigma. The pandemic has exacerbated long-term unemployment, putting more people at risk of becoming locked out of the jobs market through no fault of their own. Enhancing the Worker Opportunity Tax Credit (WOTC), including by expanding it to cover rehires, can make a real positive impact in helping those with the most employment barriers find work. With this legislation, we can encourage businesses to hire these workers as the economy reopens and business picks up,” said Congresswoman Gwen Moore.
WOTC is a well-known federal tax credit that encourages employers to hire qualifying individuals by offsetting a portion of wage costs. However, WOTC amount has not changed since its initial enactment 25 years ago. Due to wage inflation, the value of credit has significantly eroded over time, placing qualifying employees at a disadvantage during a critical time when high unemployment continues.
Qualifying individuals that private employers can hire under WOTC include: long-term unemployed (unemployed for at least 27 weeks and have received some UI benefits); veterans; Supplemental Nutrition Assistance Program (SNAP) recipients aged 18 – 39 (the largest group); recipients of Temporary Assistance for Needy Families (TANF); SSI recipients; summer youth; designated community residents; vocational rehabilitation referrals; and ex-felons.
Outside groups that support the legislation include:
- International Franchise Association
- National Restaurant Association
- American Health Care Association
“The HIRE Act is key to accelerating economic growth as the nation heals from the COVID-19 pandemic,” said Matt Haller, Senior Vice President of Government Relations & Public Affairs at the International Franchise Association. “Not only will the bill help get more Americans back to work, it will go a long way to alleviating the labor demand issue facing employers as businesses grow and customers return.”