WOTC and Hiatuses in 2019

The Work Opportunity Tax Credit (WOTC) has been in effect continuously since October 1,1996. However, as with most business tax credits, WOTC has been legislatively authorized for relatively short intervals of anywhere from 12 months to 44 months. As a result, it has not been uncommon for the credit to officially ‘sunset’ before the subsequent renewal and go into a temporary ‘hiatus.’ However, in all cases since the program’s inaugural passage, all legislative re-authorizations after a ‘hiatus’ have been seamless and retroactive to the expiration date so long as the company continued to adhere to the expired legislation’s requirements.

What Causes a Hiatus?
WOTC is just one of a large group of business tax provisions (of which there are currently more than 50) commonly called the ‘extenders’ or ‘expiring provisions’ because they are only temporarily enacted and continuously need to be extended by Congress either before or after expiration. While Congress has on occasion determined that one of these provisions should no longer be part of the tax code, for the most part they have been re-enacted as a group.
Because different Congressmen and Senators support different provisions, they all pretty much insist that the package be considered as a whole so that their pet provision does not get dropped. This dynamic drives up the cost and generally requires that there is a suitable legislative vehicle for passage. A suitable legislative vehicle for the ‘extenders’ is often not available or feasible prior to expiration. And since Congress has a long history of letting these items expire temporarily and then get renewed, they do not see an impending sunset as
significant.

In any case, WOTC remains one of the most popular and bi-partisanly supported ‘extenders’ in both Houses of Congress.

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