What is WOTC


On December 20, 2019, President Trump signed H.R. 1865 which funds domestic spending for FY 2020. A tax title was added which would extend WOTC, the hiring incentive for Empowerment Zones and the Indian Employment Credit through December 31, 2020. Also included in the package is the disaster tax relief hiring incentive. The domestic spending title on includes a $2,500,000 increase in WOTC funding for FY 2020 to help the state workforce agencies to modernize WOTC processing and clean up existing processing backlogs. This is the first increase in administrative funding in over twenty years

H.R. 1865 passed the House on December 17, by a vote of 297 to 120 and the Senate on December 19 by a vote of 71 to 23. Adding the tax title was in question up till the last minute and it was only added on December 16. We have been told that the active grassroots efforts of WOTC supporters played a significant part in persuading Congress to add a tax title.

The tax title to H.R. 1865 entitled the "Tax Payer Certainty and Disaster Relief Act of 2019" includes the following provisions:
> An extension of WOTC through 2020
> An extension from January 1, 2018 through December December 31, 2020 of:
- The Empowerment Zone hiring incentive and
- The Indian Employment Credit
> A Disaster Tax Relief retention credit for those who remained on an employer's payroll in an area which was designated as a federally "qualified disaster zone" between January 1, 2018 and sixty days after enactment which occurred on December 20, 2019. Any disaster which occurs after February 18, 2020 would not qualify, and
> The spending provisions of H.R. 1865, increases WOTC funding by $2,500,000 from an FY 2019 funding level of $19,800,000 to $21,423,000 for FY 2020


During the Week of June 16, NEON filed its comments to the Senate Finance Committee's tax extender's Task Force on Employment and Community Development. NEON testified before the Task Force and emphasized WOTC's public assistance savings, employer acceptance of the program, the flexibility of the WOTC platform, program growth as a result of the five-year PATH Act extension, and the need for a seamless permanent extension. We also discussed program improvements with an emphasis on the positive impact of lifting the age ceiling on WOTC eligibility for SNAP recipients. In addition, we referenced bills that have been introduced that would make eligible Transitional Foster Care Youth, S. 1651 and those on Social Security Disability Insurance, S. 255.

The Task Force was quite supportive of WOTC. We were asked about our savings estimates and why we don't get credit for them. We referenced our meeting between Dr. Cappelli and the head of the Joint Committee on Taxation during which we were told that they believe the program more than pays for itself. However, the Joint Committee recommended we speak with the Congressional Budget Office since the Joint Committee on Taxation only estimates the impact on revenues of changes to the tax law, and not the impact on spending programs. We explained that CBO can only estimate total annual program costs, but not how a program like WOTC impacts those costs.


NEON was instrumental in securing a $2M increase in WOTC administrative funding in the draft Senate Labor HHS Bill that was released on September 18th, 2019. NEON will work with the conferees to secure the House level of funding for WOTC.


On Thursday, June 20, the House Ways and Means Committee Reported H.R. 3301, The Tax Payer Certainty and Disaster Relief Act of 2019 which would:

Seamlessly extend WOTC through 2020, and retroactively extends through 2020 the Indian Employment Credit and Empowerment Zone hiring and provide Disaster Tax Relief which would include an employee retention credit for all 2018 and 2019 federally declared disaster areas through 60 days after the date of enactment.

During the Committee's consideration of H.R. 3301, Congressmen/woman Bill Pascrell (D-NJ), Danny Davis (D-IL), Terri Sewell (D-AL), Dwight Evans (D-PA), and Steven Horsford (D-NV) all spoke in support of WOTC.


NEON was also instrumental in securing a $2.5M increase in WOTC administrative funding in the Labor HHS portion of the House-passed Defense, the State Department, Energy and Water Development, and Labor, HHS spending bills, H.R. 2740. This would bring total administrative dollars for processing WOTC claims up to $22.3 M, a 12.6% increase which is more than the across the board 10% increase given to DOL. We are working with the Senate Labor HHS Subcommittee to secure a similar increase in the Senate bill.

Tax for 2017, 2018 and Disaster Relief Retention Credit:

Congress continues to work on moving a tax extenders package for provisions that expired in 2017 and 2018 (Indian Employment Credit and Empowerment Zones) as well as Disaster Tax Relief, including a retention credit for employers located in communities that have been impacted by 2018 hurricanes, wildfires, and mudslides.


WOTC Permanency Bills:

On April 2nd, 2019, Senators Rob Portman (R-OH) and Ben Cardin (D-MD) along with Senators Roy Blunt (R-MO), Sherrod Brown (D-OH), Bill Cassidy (R-LA) and Bob Menendez (D-NJ) introduced "The Work Opportunity and Jobs Act", S.978, which would make WOTC permanent. This was followed on April 10th, 2019, by Congressman Mike Thompson (D-CA) and Tom Reed (R-NY), along with Congressman Bill Pascrell (D-NJ), Tom Rice (R-SC) and Tom Suozzi (D-NY), introducing H.R. 2213, which would also make WOTC permanent. The Senate and House Bills and Press Releases from when the bills were introduced can be found below:

H.R. 2213

H.R. 2213 Press Release

S. 978

S. 978 Press Release


Employment and Community Development Task Force Report:

The Finance Committee released its Tax Extenders Employment and Community Development Task Force Report in August 2019 which includes a discussion on WOTC, the Indian Employment Tax Credit and Empowerment Zones, all of which provide hiring tax incentives.

The five provisions they looked at were:

New Markets Credit
Empowerment Zones
Indian Employment Credit
Mine Rescue Team Training Tax Credit
American Samoa Economic Development Credit

The central recommendation of the Task Force for the provisions they considered is that "Tax policy should be enacted with long-term horizons if not on a permanent basis."
They also recommended some prospective changes to the Indian Employment Credit that would "measure the credit using a moving average of qualified wages and health insurance costs from a set number of preceding years." This is designed to make the credit fulfill its mission of being an incremental hiring incentive.

Regarding WOTC, the report points out a number of very positive comments that they received from stakeholders:

Sixty-five public comments were submitted on WOTC with all positive comments and supported a permanent extension.

The report cited three of the main program expansion recommendation that NEON made during the presentation to the Task Force:

>WOTC should be made permanent.

>The current age ceiling on SNAP eligibility of 40 should be lifted/eliminated.
>A new category should be added for Opportunity Zones that would provide an enhanced tax credit for those who live and work in Opportunity Zones.

Two Senators submitted comments:

Bob Casey (D-PA) in support of his bill to expand WOTC to include SSI Disability recipients.

Dick Durbin (D-IL) in support of his bill to expand WOTC to include youth who have dropped out of school

While no negative comments were submitted regarding WOTC, there were comments submitted that called for the repeal of the Indian Employment Credit, Empowerment Zones, and New Markets.

The Task Force report should be viewed as a positive and will support the contention that there should be a permanent if not a multi-year extension of the program.

To view the entire report, click here 

Entities Supporting WOTC:

U.S. Chamber of Commerce

Retail Industry Leaders Association

Buffalo Wild Wings

Synergi Partners

Associated General Contractors of America

American Staffing Association

Citizens United for Rehabilitation of Errants (CURE)

International Colorado-CURE

Feeding America

Goodwill Industries International, Inc.


Paralyzed Veterans of America

Partners for Rural America

Legal Action Center

National Grocers Association

National HIRE Network

National Employment Opportunity Network

National Puerto Rican Chamber of Commerce

National Restaurant Association

Retail Industry Leaders Association

Society for Human Resource Management