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WOTC and Other Tax Extenders Must Wait

Thursday, February 16th, 2012

The House – Senate Conference has come to an agreement on what is now dubbed The Middle Class Tax Relief and Job Creation Act of 2012. Expectations are high that both the House and Senate will quickly pass the bill. President Obama has already indicated he will sign the bill.

Unfortunately, the tax extenders, including the general WOTC extension, were completely excluded from this legislation. All WOTC categories except for those favoring military veterans must now wait to be extended by another yet future tax bill.

As I’ve summarized before, this situation is not unusual for the Work Opportunity Tax Credit (WOTC) program. Of the eight times Congress has acted to renew or extend the WOTC program, three were passed retroactively months after the program’s legislative authority had expired.

The first was in March 2002 after WOTC expired on December 31, 2001.
The second was in October 2004, about ten months after WOTC expired on December 31, 2003.
The worst example to date was in December 2006, when the program was reauthorized almost 12 months after its expiration.

In each of these events, the renewal was made effective retroactively back to the date of expiration. In other words, employers were eligible to claim tax credits generated by properly certified employees hired between the expiration date and the date the WOTC program was renewed.

We continue to anticipate a similar re-authorization in 2012. For this reason, my firm will continue to process and submit WOTC applications under all employee-eligibility categories — not just for veterans.

As employers consider their strategy for 2012, they should remember that even though a general extension has not yet been passed, eligibility-categories for hiring military veterans are already authorized through 2012 by the VOW to Hire Heroes Act of 2011. The amount of tax credit currently offered for hiring unemployed veterans goes as high as $9,600 per qualifying hire.

This is an excellent opportunity to more affirmatively recruit veterans for your workforce.

Posted in Work Opportunity Tax Credit | No Responses »
Tags: payroll tax cut, Tax Extenders, The Middle Class Tax Relief and Job Creation Act of 2012, Unemployed Veterans, Veterans, WOTC Extention, WOTC Renewal

Latest News on Payroll Tax Cut Extension and WOTC Renewal

Wednesday, February 15th, 2012

I thought you might appreciate the following excerpt from a recent email update I received from WOTC Coalition President Paul Suplizio. Some of this has been reported in the news but Paul’s perspective adds something important. I am re-publishing this with his permission.

In a statement [Monday], Speaker John Boehner and Majority Leader Eric Cantor said they will no longer require offsets for the $100 billion cost to extend the payroll tax cut to the end of the year, and are preparing a bill that will extend the payroll tax cut separately if the conference reaches no agreement, leaving the conference to continue working on unemployment insurance and Medicare doctors’ payments.

The conference committee is being notified of this new Republican position, which means $100 billion of the total $160 billion cost of the payroll bill would not have to be offset.

The conferees still have time to reach agreement on a total package, but if they don’t the Speaker is free to make the effort to pass a stand-alone bill extending the payroll tax only. This would remove payroll tax as a partisan issue, but the Speaker is likely to need Democratic support because of the roughly ninety Republicans who would not vote to increase the deficit.

Senator Reid is expected to make the extenders part of the bill he has said he will introduce if the conference bogs down. He will have the option to bring it to a vote or attach it to any stand-alone payroll bill that passes the House.

Unemployment compensation and doc fix remain “must do” issues, even if payroll tax is passed separately—thus we continue to work for the tax extenders to be added to HR 3630 in conference.

If $40 billion for tax extenders is added, the total requiring offset would be $100 billion for unemployment insurance, doctors’ fix, and the tax extenders. Democrats are arguing unemployment insurance should not be offset, and a good case can be made for not offsetting the tax extenders.

Comments: The Republican leadership’s concession on not requiring a budget offset to the “cost” of the payroll-tax-cut extension reduces the total amount of offsets needed to pass all of the priority items. One of those priority items is the tax extenders, which will presumably include WOTC.

What this boils down to is that we are likely to at least see legislation soon with tax extenders attached. Whether Congress can pass it, of course, is a separate question. Nothing is certain and the political environment remains volatile.

Posted in Federal Legislation, Work Opportunity Tax Credit | 2 Responses »
Tags: Majority Leader Eric Cantor, Paul Suplizio, payroll tax cut, Speaker John Boehner, Tax Extenders, Work Opportunity Tax Credit, WOTC, WOTC Coalition

Senate Committee on Finance Holds Hearing on Tax Extenders (Including WOTC)

Monday, January 30th, 2012

Parallel to the House-Senate conference on extending the payroll tax cut, the Senate Committee on Finance is holding a special hearing on Tuesday to examine the 50 or more tax extenders that expired in December. The hearing is titled: Extenders and Tax Reform: Seeking Long-Term Solutions.

According to a Monday article in Accounting Today,

At Tuesday’s hearing, Senate Finance Committee Chairman Max Baucus, D-Mont., ranking Republican member Orrin Hatch, R-Utah, and the witnesses will discuss how best to approach tax extenders in order to create certainty and allow businesses to invest confidently and create jobs.

Witnesses scheduled to testify include Rutgers University economics department chair Rosanne Altshuler, George Mason University senior research fellow Jason J. Fichtner, University of Texas law professor Calvin H. Johnson, and U.S Chamber of Commerce chief tax counsel Caroline L. Harris.

Many of these details can be had on the hearing’s page on Senate Committee on Finance’s website. Click here.

Submit a Statement for the Record (We all should do this now)

You and your organization or business can submit a statement to the committee to get your views into the record. It’s a simple process but there are a few details of protocol that must be observed. The following is copied directly from the Senate website (emphasis added by underlining).

Any individual or organization wanting to present their views for inclusion in the hearing record should submit a typewritten, single-spaced statement, not exceeding 10 pages in length. Title and date of the hearing, and the full name and address of the individual or organization must appear on the first page of the statement. Statements must be received no later than two weeks following the conclusion of the hearing.

Statements should be mailed (not faxed) to:

Senate Committee on Finance
Attn. Editorial and Document Section
Rm. SD-219
Dirksen Senate Office Bldg.
Washington, DC 20510-6200b

Posted in Federal Legislation | No Responses »
Tags: Calvin H. Johnson, Caroline L. Harris, Jason J. Fichtner, payroll tax cut, Rosanne Altshuler, Senate Committe on Finance, Senator Max Baucus, Senator Orrin Hatch, Tax Extenders

WOTC Call to Action – New Developments for WOTC and Tax Extenders

Friday, January 27th, 2012

There are new developments in the effort to include WOTC and other tax-extenders in the upcoming payroll tax cut bill. A Senate-House conference is currently negotiating to extend the payroll tax cut, which expires in February.

Paul Suplizio, President of the WOTC Coalition, reports that Ways and Means Chairman Dave Camp is “waving off in advance an expected offer from Senator Baucus” to include tax extenders in the bill. Max Baucus is Chairman of the Senate Finance Committee.

Mr. Suplizio goes on to explain, however, that while Chairman Camp’s statements should be taken seriously they do not halt the current tax-extenders discussion.

The Senate and President Obama both want the tax extenders in the bill. As a result, WOTC and other tax extenders have become a negotiating chip for Chairman Camp and the House Republicans who want to include other important but controversial provision in the bill.

For WOTC supporters, our job now is at least two-fold. (1) We must persuade Senate conferees to INSIST on including WOTC and the other extenders in the bill. And (2) we must persuade House Speaker Boehner that it will be in the House Republicans’ interest to agree on their inclusion.

Paul Suplizio said it well in a recent correspondence to members of the WOTC Coalition.

“We need to drive home to Speaker Boehner that not including the extenders is putting House Republicans on record as favoring a tax increase on businesses, farmers, communities, and workers—a tax increase they don’t need at this stage of the recovery.”

Is your fax machine and telephone working? Time is short. Time to roll.

Posted in Federal Legislation, Work Opportunity Tax Credit | No Responses »
Tags: Paul Suplizio, payroll tax cut, Representative Dave Camp, Senator Max Baucus, Tax Extenders, WOTC, WOTC Coalition, WOTC Extention

WOTC Extension Must Wait Until 2012

Friday, December 23rd, 2011

It’s been all over the news. The U. S. House and Senate agreed to pass a 2-month extension of the 2011 payroll tax reduction. Unfortunately, the tax extenders including WOTC, Research and Development and other important tax incentive programs were not included in this hotly contested legislation.

It is clear, however, that the White House and Senate leadership continue to support tax extenders, which are one of the Senate’s top priorities.

With the agreement to pass the 2-month extension of the payroll tax reduction, Senate and House leaders have also agreed to appoint conferees to hammer out a full 12-month extension. It is in this process that we have our next opportunity to see tax extenders, including WOTC, gain traction for 2012 renewals.

Paul Suplizio, President of the WOTC Coalition, has set the Coalition on course to begin a new campaign on January 2, 2012. The objective, of course, is to persuade House and Senate conference members to include the full-WOTC extension and other tax extenders in the final payroll bill.

Stay tuned . . . it won’t be long.

Posted in Federal Legislation, Work Opportunity Tax Credit | 2 Responses »
Tags: Paul Suplizio, payroll tax reduction, Research and Development Credit, Tax Extenders, WOTC, WOTC Coalition

Renewal of WOTC and Payroll Tax Cut Still Possible This Year

Monday, December 19th, 2011

If you’ve been following the news during the past few days, you might be aware that Congressional leaders are sparring over legislation to extend the existing payroll tax cut. Over the weekend, the Senate rejected the House’s proposal and responded with a proposed 2-month extension, obviously intended to buy time for further negotiations.

Neither version of the legislation included WOTC nor other sought after tax-extenders. This is not, however, the end of the game.

The limited 2-month extension is not looked upon favorably by the House Republican leadership, which is demanding a full year. The House is scheduled to vote on the bill this evening.

According to Bloomberg,

With the House set to return to Washington [Monday], Republican leaders are studying their options, Laena Fallon, a spokeswoman for House Majority Leader Eric Cantor, a Virginia Republican, said in an e-mail.

When the House meets [Monday evening], it will either vote to amend the Senate-passed measure “so that it is responsible and in line with the needs of hard-working taxpayers and middle class families” or vote to appoint representatives to a House-Senate conference to reconcile differences between the two chambers, she said.

Got that? The House will either amend the Senate bill and return it. Or it will vote to appoint a conference with the Senate to negotiate revisions. If the House does call for a conference, the Senate leadership (aka Senator Harry Reid) could accept or reject it. But rejecting it in that case would result in a tax increase on January 1 as the payroll tax reduction expires. Not a pretty political sight.

If a conference is called, Paul Suplizio, President of the WOTC Coalition sees still another opportunity to get WOTC and other tax extenders passed this year.

“If it gets to a conference, Ways and Means Chairman Dave Camp of Michigan would be one of the conferees for the House (he was floor manager for the House bill) and Finance Chairman Max Baucus of Montana a likely conferee for the Senate.”

“Chairman Camp has been the target of much of our lobbying and knows the situation of WOTC and the extenders. Senator Baucus has been a champion for including WOTC and the other extenders in the payroll bill.”

If you have any opportunity to encourage Representative Dave Camp or Senator Max Baucus, now is the time. Senator Harry Reid and his friends in the Whitehouse should also be contacted. Senator Reid will likely require encouragement from the Whitehouse to include WOTC and other tax extenders in any negotiated resolution to this legislative conflict.

Posted in Work Opportunity Tax Credit | 4 Responses »
Tags: Paul Suplizio, Representative Dave Camp, Senator Harry Reid, Senator Max Baucus, Tax Credits, Tax Extenders, U.S. House of Representatives, U.S. Senate, Work Opportunity Tax Credit, WOTC, WOTC Coalition

Urgent WOTC Update – Inform Your Republican Senators Now

Tuesday, December 6th, 2011

Our friend Paul Suplizio, President of the WOTC Coalition, issued two urgent updates this morning from Washington DC. The immediate extension of WOTC and other tax incentive programs faces what amounts to a precarious opportunity.

As the calendar year winds to a close, opportunities to extend the WOTC program are few in number. The good news is Senate Majority Leader Harry Reid has announced his intention that Congress will NOT adjourn until tax extenders are done. He made this announcement in a news conference after the Senate Democrats’ most recent weekly luncheon.

“There are five things we’ve got to do, the Omnibus (bill to fund the government), payroll tax, unemployment compensation, doc fix, and tax extenders.”

What to do Right Now:
According to Mr. Suplizio, if the tax extenders are not passed before December 31, there is a strong possibility they won’t be passed until after the elections next fall. For this, and other reasons:

“It’s imperative we now work to persuade Senate Minority Leader Mitch McConnell to commit to enacting the tax extenders before adjournment. Please concentrate urgently on your Republican senatorial contacts. . . .”

Specifically,

Inform your Republican contacts in the Senate about Majority Leader Harry Reid’s goal to pass tax extenders before adjournment
Urge Senate Republicans to support the tax extenders
Urge them specifically to talk with Senate Minority Leader Mitch McConnell and Republican Whip Senator Jon Kyl about the importance of including tax extenders in whatever bills emerge from their negotiations with Senate Democrats.

Posted in Work Opportunity Tax Credit | No Responses »
Tags: Ominbus, Paul Suplizio, payroll tax cut, Payroll Tax Holiday, Republic Whip, Senate Majority Leader Harry Reid, Senate Minority Leader Mitch McConnell, Senator Jon Kyl, Tax Extenders, Work Opportunity Tax Credit, WOTC, WOTC Coalition

Now Is Time to Contact Congress – Include WOTC in Tax Extender

Wednesday, November 30th, 2011

If you or your clients would be adversely affected by the expiration of the WOTC program on December 31 (just one month away), then NOW is the time to contact your member of Congress.

You don’t have to speak with the member directly. Speak with the staff member that answers the phone. Send them a fax. Send them a letter. (Unless, you have an existing relationship with a specific member of your Congress person’s office, I don’t recommend relying on email.) Tell them your story and ask them to support including WOTC in the year-end tax extenders legislation.

Contact information for members of Congress is available at www.senate.gov and www.house.gov or (202) 224-3121 or (202) 225-3121. An online directory I recently discovered, provided by the Conservative Caucus appears to be a thorough resource also, including fax numbers, email addresses, and links directly to each Member’s website. http://www.conservativeusa.org/mega-cong.htm

Below are some informational points that I sent to my Congressman Dan Lungren just this morning. Since we already know each other, I sent my correspondence directly to Congressman Lungren’s District Director in California. She very kindly responded to my e-mail in less than twenty minutes.

“I am going to forward your email to our Legislative Counsel in DC as he will brief the Congressman on the legislation and the latest developments.”

As the year’s end approaches, Tax Extenders are, or will soon become a topic of discussion for Members of Congress. WOTC will be included in that discussion as one of the tax provisions to be extended.

I have three points that the Congressman may find important.

1. All Non-Veteran Job Categories Will Expire. While the VOW to Hire Heroes Act extended through 2012 the WOTC categories for veterans, all other WOTC job categories are still slated to expire on December 31. The categories for disabled workers, at-risk youth, people living in distressed communities, etc. will all expire abruptly THIS YEAR unless WOTC is included in a tax extender bill.

2. Ending WOTC = Crushing Tax Increase on Employers: An abrupt end to these WOTC categories will result in a large tax increase to employers who have incorporated WOTC’s public-private sector partnership into their hiring practices.

3. Tax Extender Now – Followed Later By Due Diligence. The future of the WOTC program ought to be determined by a reasoned discussion in Congress – - not by letting it slip through the cracks at year-end. The recent VOW to Hire Heroes Act demonstrates that the effectiveness of WOTC is still recognized on both sides of the aisle — after 15 years in operation! If the rest of the WOTC program is to be discontinued, it should be done in an orderly way that allows employers to anticipate the change . . . after Congress has given due consideration to the issues.

Bottom Line: extend the entire WOTC program now for at least 12 months, giving Congress time to discuss its merits in 2012.

For my readers, I would also point out that if WOTC is not extended by the end of the year, it is still far from over. There will be additional opportunities for reauthorization in 2012. Although inconvenient, this would not be at all unusual for the WOTC program.

WOTC has been extended 7 times already since it’s origination in 1996. Frequently, that process has involved “retroactive” reauthorization during the calendar year after its technical expiration. In each such case, business continued as usually, with the exception that WOTC certification offices nationwide had to keep back their certifications until the reauthorization legislation finally went through.

My point: Be diligent now, but don’t worry yet.

Posted in Work Opportunity Tax Credit | 2 Responses »
Tags: Tax Credits, Tax Extenders, VOW to Hire Heroes Act of 2011, Work Opportunity Tax Credit, WOTC

The Rocky Road of WOTC

Wednesday, July 20th, 2011

No. I am not thinking about ice cream. Well, maybe I am. But with all this talk about the Work Opportunity Tax Credit program, one wonders…. “Has the life of this program always been so volatile?”

“Why, yes,” you say, ”it has.”

WOTC is currently slated to expire on December 31, 2011. A quick review of WOTC’s legislative history, however, demonstrates that it has already expired and been renewed 8 times since it’s creation in 1996. The New Hampshire Employment Security Department has published a convenient history of the program’s history. I summarize the following from their document.

WOTC was:

* Created by the Small Business Job Protection Act of 1996, which authorized WOTC for a 12 month period

* Extended for 9 months by The Taxpayer Relief Act of 1997

* Reauthorized and extended for another 12 months by The Tax and Trade Relief Extension Act of 1998

* Extended for an additional 30 months (through December 21, 2001) by the Ticket to Work and Work Incentives Improvement Act of 1999

* Extended for 24 months by The Job Creation and Worker Assistance Act of 2002 (note this was not passed until March 2002, meaning the reauthorization was retroactive after the program expired on December 31, 2001)

* Retroactively reauthorized and extended for 24 months by The Working Families Relief Act of 2004. This act was passed in October 2004, when WOTC had already expired on December 31, 2003

* Retroactive reauthorized and extended for 24 months by The Tax Relief and Health Care Act of 2006. This act was not passed until December 2006 — almost 12 months after the program had expired on December 31, 2005.

* Further extended for another 44 months (through August 31, 2011), just 7 months later, by The Small Business and Work Opportunity Tax Act of 2007

* Extended 4 months, through December 31, 2011 by the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010

One might also wonder, what happened to the participating employers, benefiting workers, and the marvelous WOTC government bureaucracy during these periods between expiration and reauthorization? Did they go away for a while, take a vacation, a long nap?

I lived through a number of these periods. We continued business as usual for the most part . . . but with a finger continually crossed while the lobbyists and congress people everywhere worked to achieve an extension.

Employers continued hiring new workers and submitting WOTC employee applications to their state WOTC centers. The WOTC government bureaucracies continued to function, accumulating massive backlogs of pending certifications, since they were not authorized to evaluate and issue certifications under a non-existing program. When the next round of legislation was finally passed, the paperwork began to flow and eventually everyone caught up.

WOTC has been a well-loved success from many perspectives for the past 15 years. If legislation providing a program extension can not be achieved within the context of the very heated political discussion now taking place in Washington DC, then it is likely to be achieved in the following months of 2012. My personal bet, however, is that an extension will be forthcoming soon.

Posted in Federal Legislation, Work Opportunity Tax Credit | 2 Responses »
Tags: History of WOTC, Tax Credits, Tax Extenders, Work Opportunity Tax Credit, WOTC

Washington DC Meeting Schedule to Discuss Campaign to Extend WOTC