President’s 2014 Budget Proposal – Permanent WOTC
In a proposed 2014 budget, The Obama administration has laid out its plan to address spending cuts to defense, and shoring up social security to the tune of 230 Billion. Significantly, the President’s budget includes a permanent extension of the Work Opportunity Tax Credit (WOTC) and the Indian Employment Credit (IEC).
Currently, WOTC and IEC must continuously be renewed and extended as a matter of legislative action. Indeed, since its inception WOTC has expired and entered “hiatus” numerous times. While it has always been renewed, retroactively if necessary, the constant expiration makes it difficult for businesses that hire to effectively plan their hiring and tax strategies on both a long term and short term basis.
The president’s proposal would eliminate this uncertainly by making both credits permanent. The document includes this section speaking specifically of WOTC:
“The Administration also continues its support of tax credits that will help employ veterans. The Returning Heroes Tax Credit, which provides up to $5,600 to employers, and the Wounded Warrior Tax Credit, which provides up to $9,600 to hire long-term unemployed veterans with service-connected disabilities, were recently extended for one more year in the American Taxpayer Relief Act of 2012. These credits are a part of the Work Opportunity Tax Credit (WOTC), which contains other categories targeted to hiring veterans. The Budget proposes to permanently extend the WOTC.”