On February 8, 2021, a bipartisan bill named the Work Opportunity Tax Credit & Jobs Act was introduced by U.S. Senators Rob Portman (R-OH), Ben Cardin (D-MD), Roy Blunt (R-MO), Sherrod Brown (D-OH), Bill Cassidy (R-LA), and Bob Menendez (D-NJ) which would strengthen federal efforts to connect long-term unemployed with jobs.
The current program legislation is set to expire on December 31, 2025, but this bill would make an employer tax credit a permanent solution for those who hire individuals who face barriers to employment.
“Because of the ongoing COVID-19 pandemic, now more than ever individuals who are in the shadows are struggling to find meaningful employment”, said Senator Portman. “Encouraging employers to hire those who have the most trouble finding work is good policy, and wile securing a five-year extension last year was a positive step, it’s critical that we make the Work Opportunity Tax Credit permanent.”
“The Work Opportunity Tax Credit is one of our best tools to promote the employment of those who find it hardest to get a job. But to be effective employers need the certainty a permanent extension provides and tens of thousands of families in Maryland need to know we have their back from now on,” said Senator Cardin. “That’s why we need to invest in this effective program permanently, to ensure those who need the most help are getting it.”
The Work Opportunity Tax Credit Program provides an employer tax credit of between $1,200 and $9,600 per employee for hiring and retaining individuals that are part of certain targeted groups representing populations that have a difficult time finding work, or are often out of the labor force altogether. The credit amount is based on the qualified wages paid to those employees within the targeted groups including veterans, long-term unemployed, ex-felons, the disabled, summer youth employees, as well as Temporary Assistance for Needy Families, Supplemental Nutrition Assistance Program, and Supplemental Security Income recipients.
“The COVID pandemic has hammered our nation’s economy, leaving millions out of work and small businesses struggling to survive,” said Senator Bob Menendez. “As we begin to recover from this crisis and build back an economy that works for all Americans, making the Work Opportunity Tax Credit permanent will provide certainty for employers to hire the long-term unemployed, veterans, and others who’ve been locked out of the workforce. We have both an economic interest and moral obligation to ensure that every individual has a fair shot in our economy to work hard, support a family and contribute to our society. Making this tax credit permanent is the smart and right thing to do.”
Last week, the U.S. Bureau of Labor Statistics reported that employers added 196,000 jobs in March, and the unemployment rate remained unchanged at 3.8 percent. However, the number of long-term unemployed people (those who were without jobs for 27 weeks or more) was essentially unchanged at 1.3 million in March and accounted for 21.1 percent of the unemployed.
“It can be difficult for Americans to find a job when they’re out of the work force,” said Dr. Cassidy. “This Work Opportunity Tax Credit permanency bill ensures those struggling to find work are helped by continuing to incentivize businesses to hire them.”
The bill has been sent to the Senate Finance Committee for further review and we are hopeful this permanent solution is underway.
As always, if there are any questions please do not hesitate to contact us or visit our website at www.thomas-and-company.com.
