WOTC MEANS JOBS

KEY IN WELFARE REFORM

The WOTC program was enacted as a key component of the 1996 welfare reform law. To date, it has helped nearly 12 million individuals coming off public assistance programs to secure jobs, become productive, and gain economic stability. Validating the program’s successes, Congress has over the years expanded WOTC to include other “Target Groups”, most recently adding unemployed veterans.

View a brief fact sheet on WOTC here

IT'S PROVEN: WOTC WORKS

Based upon the work of Dr. Peter Cappelli, a labor economist at the Wharton School at the University of Pennsylvania, NEON has been able to inform members of Congress that WOTC does what it is supposed to do – influence employer hiring practices. His work demonstrates that WOTC is a cost effective way to encourage the private sector to hire those receiving public assistance.

According to Dr. Cappelli’s study:

  • Employers respond to the tax incentive and change their hiring practices by targeting WOTC eligible individuals.
  • The earnings of someone hired through WOTC exceed what one can earn and continue to remain on public assistance programs such as, welfare, food stamps, and Medicaid.
  • The average WOTC hire stays on the job 2.3 years.
  • The federal government enjoys average net savings of $17,722 per individual hired in welfare, food stamps, housing subsidies, and Medicaid.
  • WOTC saves states $1.7 billion collectively each year in matching and administrative costs for welfare, food stamps, and Medicaid.

PAST WOTC VICTORIES

At the end of 2014, Congress passed a one-year extension of WOTC to allow employers who had hired WOTC-eligible individuals over the course of the past year to recieve the credit they had planned on. NEON is working to ensure that employers who want to hire WOTC-eligible individuals will have certainty in the future.

American Taxpayer Relief Act of 2012: As a result of the tireless advocacy work through meetings, phone calls and emails by the National Employment Opportunity Network (NEON) and its supporters, President Obama signed into law ATRA on January 2, 2013. ATRA extends several expired or expiring business tax incentives including:

  • WOTC - extended seamlessly for two years through 12/31/13.
  • Empowerment Zone Employment Credit  - extended seamlessly  retroactively through 12/31/13, includes Designated Community Resident (DCR).
  • Indian Employment Tax Credit - extended seamlessly retroactively for two years through 12/31/13.

Veterans Opportunity to Work (VOW) to Hire Heroes Act of 2011: Signed into law on November 21, 2011 the legislation is designed to help veterans of war transition into civilian employment.  The VOW act amends and expands the definition of the WOTC “qualified veteran” category, granting a tax credit to employers for hiring certain qualified veterans.

WOTC UPDATES

Congress is currently considering a major overhaul of the tax system. In order to reduce rates all tax incentives including WOTC are at risk. It is important that you send an e-mail to your congressman and your two senators and urge them in the House to talk with Ways and Means Chairman Brady and in the Senate Finance Chairman Hatch to include WOTC through 2019 in their tax reform bills.


We have drafted a letter to send to your congressman and a separate letter to send to both of your senators. Don't delay, act today to save WOTC. Click on Take Action tab above to contact Congress today.

NEON SECURES RETENTION HIRING CREDIT FOR THOSE IMPACTED BY HURRICANES HARVEY, MARIA, AND IRMA.

NEON successfully worked with members of congress to include a retention hiring tax credit in the Disaster Tax Relief and Airport and Airway Extension Act of 2017 (H.R.3823). The bill was signed into law on September 29. It provides a retention credit equal to 40% of the first $6,000 in wages paid to an employee retained on an employer’s payroll. The employer had to be located in a Hurricane Harvey, Maria, or Irma FEMA designated disaster zone. To determine whether a business is located in a FEMA designated disaster zone go to www.fema.com click on Navigation, and then click on Disaster Declarations, then click on the appropriate declaration. The credit is available to businesses that became substantially inoperable after August 23 in the case of Harvey; September 4 in the case of Irma, and September 16 in the case of Maria until the earlier of when the business becomes substantially operable again or no later than January 1, 2018.

NEON ENDORSES FOSTER CARE WOTC PROVISION

Each year, over 23,000 young people age out of the foster care system.  Unfortunately, by the time they reach twenty four, fifty percent of individuals who have been in the foster care system are unemployed. The National Employment Opportunity Network is pleased to endorse the McDermott/Reichert Improved Employment Outcomes for Foster Youth Act of 2016, H.R. 5947 which would include foster care transition youth as a category under the Work Opportunity Tax Credit (WOTC). Rep. McDermott (D-WA), Rep. Reichert (R-WA), and committee staff reached out for out assistance in developing this important legistlation. Inclusion of foster care youth in WOTC will help foster care youth to find gainful employment, thus making them independent while at the same time reducing their reliance on public assistance programs.

DOL TO ADMINISTER HUD EZ/EC LOCATOR

The Department of Labor has released their new address locator system for Designated Zone Residents which will replace the HUD locator. Under the DOL's new system, companies can look up whether a resident or business is in the zone. If so, you can download and file that along with your request for certification. If you cannot find a valid address on the DOL locator, then you may submit a signed statement from a county or local government agency certifying the 1990 – 2000 census track numbers of the address in question.  The statement must be on official letterhead. The State Workforce Agency could request that you send accompanying documentation such as a map of the site.

Find the locator here.

FIVE YEARS FOR WOTC

Before going into recess last year, Congress passed the Protect Americans from Tax Hikes (PATH) Act, which included a five-year extension of WOTC. With this certainty going forward, employers can move forward with hiring decisions and help people transition into the workforce.

EXPANDING WOTC TO INCLUDE THE LONG-TERM UNEMPLOYED

NEON is pleased to note that the PATH Act, passed in December 2015, expands WOTC to include the long-term unemployed, defined as those who have been out of work for twenty-six or more weeks. This will go a long way toward helping those who have been left behind in the economic recovery. 

It's common knowledge: the longer you're out of a job, the harder it is to get a job. The long-term unemployed comprise nearly a third of the jobless in America. The social and economic challenges they face impact not only the unemployed, but their families and their communities as wellPast studies by Peter Cappelli have documented that WOTC influences employer hiring practices; including the long-term unemployed in WOTC would help reintegrate these individuals into the workforce, lift them from dependency on social programs, and improve health and wellbeing for them, their families, and their communities.