WOTC Update: Aaron Schock Pushes WOTC extension; IRS Urges Extension of WOTC Extender Bill
In August, Rep Aaron Schock of Illinois introduced H.R. 5264 “To amend the Internal Revenue Code of 1986 to make the work opportunity credit permanent.” The bill would extend WOTC one year retroactive to cover the current hiatus and would also make WOTC permanent. Mr. Schock and his Co-sponsor Charles Rangel of NY have published a “Dear Colleague” letter to try to garner support among congress for this important renewal bill. The letter says of WOTC that,
Since its enactment as part of welfare reform in 1996, the Work Opportunity Tax Credit (WOTC) has helped over twelve million public assistance-dependent individuals transition into private sector jobs. WOTC is a successful, cost-efficient way to expand the workforce and reduce dependency. That is why we have joined together to introduce H.R. 5264, which would make WOTC permanent.
Recent studies of WOTC indicate that the program more than pays for itself by keeping those hired off public assistance. A study from Pennsylvania’s Wharton School of Business concluded that, “WOTC is one of the most effective hiring programs ever” – that the federal government enjoys net savings of $17,700 in just TANF, SNAP, Medicaid, and housing subsidies for each certified WOTC hire. Another study found that WOTC saves states collectively $1.7 billion a year in matching and administrative costs for TANF, Medicaid, and SNAP.
In addition, somewhat uncharacteristically for an IRS employee, IRS commissioner John Koskinen urged congress to fast lane approval and extension of the tax extenders, including WOTC, with as few changes as possible. He pointed out that any changes to already implemented tax provisions (including programs in current hiatus) will require internal changes to IRS tax processing systems, and would cause difficulty for his agency. He explained that, “To the extent that new tax legislation or changes in the way the provisions that’s being extended are implemented make it more complicated for us”.
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