Obama’s America’s Jobs Act Proposes Expansion of WOTC Eligibility
As reported earlier on this blog, President
Obama has introduced The American Jobs Act; a broad-reaching
proposal for extensive spending and tax cut measures aimed at trying to hasten the
country’s exit from the current recession. Notably, some of the tax cuts proposed
can actually be considered extensions or expansions of current incentives available
under the Work Opportunity Tax Credit. Additionally, each proposed category
provides enhancements to the WOTC program to benefit tax exempt organizations, as
well as ease the certification process and administrative burden of the State Workforce
Agencies who certify eligibility for those eligible for WOTC. The bill proposes
that tax-exempt organizations will be allowed to apply the qualifying credit amounts
against payroll tax liability. Additionally, it proposes simplification of certification
for these categories.
Sec. 201 of the bill proposes the “Returning Heroes” and the “Wounded Warrior” hiring tax
credits for veterans. This would provide tax credits from $5,600 to $9,600 to encourage
the hiring of unemployed veterans, and up to $9,600 for hiring unemployed workers
with service-connected disabilities who have been looking for a job for more than
six months. These proposed categories resemble the now expired unemployed veterans
and unemployed and disabled veterans categories of WOTC.
Sec. 351 of the bill proposes a category for long term unemployed workers. The bill
defines long term unemployed worker to mean any individual who was not a student for
at least 6 months during the 1-year period ending on the hiring date and is certified
as having aggregate periods of unemployment which equal or exceed 6 months.
One of the sometimes overlooked aspects of these types of tax cuts are the infrastructure
costs required to enact them. Indeed, laws must be written, the IRS must issue
guidance on reporting, tax filing forms need to be created or updated to accommodate
the new legislation, and so on. However, as far as the noted measures above,
a far simpler, cost effective, and expeditious means to enacting these tax cuts would
be to roll them into the existing WOTC programand enact them without delay before the
coming expiration of WOTC on December 31, 2011.
The infrastructure to support WOTC; that is, the state workforce agencies who issue
certifications, the forms required for claiming the credit, and an extensive set of
Department of Labor Training and Employment Guidance Letters is already in place.
Let’s use them!
This weblog is sponsored by TALX.
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