David Burgess, VP of Government Relations
Momentum is building in Congress to make WOTC permanent.

  • WOTC was created in 1996 as part of the welfare reform act to aid people making the transition from welfare to work. Since that time it has been reauthorized numerous times, although occasionally it has gone into haitus for a time while waiting for funds to be authorized.
  • Most recently WOTC was reauthorized in 2015 as part of the PATH Act, but that reauthorization is due to expire at the end of the year.
Recently two bills, one in the Senate, another in the House, were introduced that would make WOTC permanent.
  1. In the Senate long-time WOTC supporters Rob Portman (R-OH) and Ben Cardin (D-MD) were joined by Roy Blunt (R-MI), Sherrod Brown (D-OH), Bill Cassidy (R-LA), and Bob Menendez (D-NJ) to introduce Senate Bill S. 978.
  2. A week later, H. R. 2213 was introduced by Chairman of the Ways and Means Select Revenue Measures Subcommittee Mike Thompson (D-CA), Tom Reed (R-NY), Bill Pascrell (D-NJ), Tom Rice (R-SC), and Tom Suozzi (D-NY). These bills demonstrate strong bi-partisan support for the program.
From the announcement of the bill, H. R. 2213:
“For more than two decades, the Work Opportunity Tax Credit has proven to be highly effective in ensuring individuals on public assistance can make the transition to private sector jobs. In fact, since the program’s enactment, thirteen million people have benefitted, in turn reducing federal and state government spending,” said Chairman Thompson. “The tax credit is set to expire at the end of this year and I’m proud to introduce my bill to permanently extend this bipartisan, cost-effective program.”
While this is not the first attempt to make WOTC permanent, it is the earliest we have seen this level of interest on the part of both houses to get something done. In the early 2000s permanency bills were introduced but never passed.
What is different now? There are a couple of new factors.
First, in the early 2000s the program was still relatively new. Since that time the program has grown in size and scope. Since it now has some history, there has been a chance to study its impact over a longer period. Well-known labor economist Peter Cappelli from the Wharton School of Business did an extensive study over the last several years. His findings show that WOTC saves both state and federal governments at least $85 billion over ten years because it reduces spending on programs like TANF, SNAP, Medicaid, and housing assistance. Even at this time of a growing economy and record low unemployment rates, his studies show that tax credits still give the structurally unemployed and underemployed the help they need to secure jobs.

Second, support for WOTC has been embraced by a growing number of important community organizations. These include the National Grocers Association, SHRM, Goodwill Industries, the National Restaurant Association, and Paralyzed Veterans for America among numerous others. Now the United States Chamber of Commerce is also throwing their weight behind both bills and has drafted a letter to members of Congress stating their “strong support” for the “permanent extension” of WOTC. Despite bipartisan support for the program, there will still be obstacles to overcome to reach an agreement, but the chances have never been better.


If you would like more information please us at 206.547.8277 or email me at drdburgess@mckenziechase.com.