The Journal of Accountancy recently reported that the Work Opportunity Tax Credit could receive a significant expansion via the the budget reconciliation bill known as the “Build America Back Better” Act which is currently in the Ways and Means Committee.
The act proposes an adjustment to the Work Opportunity Tax Credit during the “Covid-19 Recovery Period,” which would run through January 1, 2023.
Work Opportunity Tax Credit: The proposal would increase the Work Opportunity Tax Credit to 50% for the first $10,000 in wages, through Dec. 31, 2023, for all WOTC targeted groups except for summer youth employees.
In addition to the increased amount of tax credit, the bill includes the removal of the restriction against re-hires. This would mean that both new hires, and previous employees could potentially qualify. From the bill:
- INCREASED AMOUNT OF CREDIT.—Sub15 section (a) shall be applied by substituting ‘50 percent’ for ‘40 percent’.
- AVAILABILITY OF CREDIT IN SECOND YEAR OF EMPLOYMENT.
- INCREASE IN LIMITATION ON WAGES TAKEN INTO ACCOUNT.—Subsection (b)(3) shall be applied by substituting ‘$10,000’ for ‘$6,000’.
- ELIGIBILITY OF REHIRES.
Read More:
Ways and Means releases list of tax provisions for budget bill (Read @ Journal of Accountancy)
AMENDMENT IN THE NATURE OF A SUBSTITUTE TO THE COMMITTEE PRINT OFFERED BY MR. NEAL OF MASSACHUSETTS (Read @ House Ways and Means Committee – PDF – Pages 736-737)
About CMS WOTC Screening Services
- Why you should use CMS’s WOTC Tax Screening Service rather than doing it yourself.
- Get an idea of how much you could be saving by utilizing the Work Opportunity Tax Credit for your company, try our WOTC Calculator.
- Are you a CPA or tax service provider? Find out how you can become a strategic Business Partner.
Contact CMS Today to Start Saving!
In over 20 years of providing valuable WOTC Screening and Administration services we’ve saved millions for our customers.
Contact CMS today to start screening now.