Improve and Enhance the Work Opportunity Tax Credit Act
Summary
The "Improve and Enhance the Work Opportunity Tax Credit Act" aims to modify and extend the Work Opportunity Tax Credit (WOTC). It extends the credit through 2030, increases the credit amount for longer-service employees, and adjusts eligibility criteria. The bill also removes the age limit for qualified Supplemental Nutrition Assistance Program (SNAP) recipients and includes military spouses as a targeted group.
Expected Effects
The act is likely to incentivize employers to hire individuals from targeted groups by increasing the tax credit. This could lead to increased employment opportunities for veterans, SNAP recipients, and military spouses. The inflation adjustments will help maintain the real value of the credit over time.
Potential Benefits
- Increased employment opportunities for targeted groups, including veterans, SNAP recipients, and military spouses.
- Enhanced tax credits for employers who retain employees for longer periods.
- Simplification of certain eligibility requirements, such as removing the age limit for SNAP recipients.
- Promotion of hiring in critical industry sectors through inter-agency collaboration.
- Extension of the WOTC program, providing long-term certainty for employers.
Potential Disadvantages
- Increased complexity in calculating the credit due to multiple tiers and adjustments.
- Potential for employers to focus on hiring targeted groups solely for the tax credit, rather than for their skills or qualifications.
- Administrative burden for employers to track employee hours and eligibility for the enhanced credit.
- Possible displacement of non-targeted group members in the labor market.
- The cost of the tax credits may increase the national debt if not offset by economic growth.
Constitutional Alignment
The bill aligns with the Constitution's Article I, Section 8, which grants Congress the power to lay and collect taxes, duties, imposts, and excises to provide for the general welfare of the United States. The WOTC, as amended, falls under this power as it aims to incentivize employment and reduce poverty. The bill does not appear to infringe upon any individual liberties or rights protected by the Bill of Rights.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).