Congress Renews WOTC and Other Tax Provisions
Congress recently approved, and President Trump has signed into law the Taxpayer Certainty and Disaster Tax Relief Act of 2019. It renews several tax provisions, including the Work Opportunity Tax Credit (WOTC), Indian Employment Credit (IEC), Federal Empowerment Zone (FEZ) and employee retention credits for employers affected by disasters.
This new bill now extends WOTC through December 31, 2020.
WOTC is a government incentive program used to encourage private-sector employers to hire people from certain groups who face employment barriers. The government’s list of target groups include, but are not limited to:
- Food stamp recipients
- Family assistance recipients
This program helps communities, as well as employers with beneficial tax credits that range up to nearly $10,000 per eligible candidate. The Equifax Workforce Solutions’ Government Relations team has been working all year with lawmakers in Washington, D.C., to advocate on behalf of employers and our clients. Therefore, we're excited to deliver this good news.
What is the Taxpayer Certainty and Disaster Tax Relief Act of 2019?
The Taxpayer Certainty and Disaster Tax Relief Act of 2019 includes these provisions:
- Work Opportunity Tax Credit (WOTC) – Extends WOTC for one additional year, amending its expiration from Dec. 31, 2019 to Dec. 31, 2020.
- Indian Employment Credit (IEC) – Retroactively extends IEC for two years and extends IEC for one additional year, amending its expiration from Dec. 31, 2017 to Dec. 31, 2020.
- Federal Empowerment Zone (FEZ) – Retroactively extends FEZ for two years and extends FEZ for one additional year, amending its expiration from Dec. 31, 2017 to Dec. 31, 2020.
- Employee Retention Credit for Employers Affected by Qualified Disasters – Employee retention credit for any taxable year is an amount equal to 40 percent of the qualified wages with respect to each eligible employee of such employer for such taxable year. Additionally, the amount of qualified wages with respect to any individual shall not exceed $6,000.
What is the Disaster Retention Credit?
This new tax credit applies to employers conducting active trade or business in a qualified disaster zone at any time during the incident period of the qualified disaster. In addition, employers have to have been inoperable as a result of the damage sustained by the qualified disaster. Finally, the employee's main place of employment must be within the qualified disaster zone.
What is a Qualified Disaster Zone?
A qualified disaster zone means any portion of any qualified disaster area that was determined by the President. Specifically, this covers the period of Jan. 1, 2018, and ending on Feb. 20, 2020 (60 days after enactment of this Act), to warrant assistance. If Congressional action hadn't happened before the end of 2019, then WOTC would have entered into hiatus. Considering the challenging partisan issues currently facing Congress, it is significant that Republicans and Democrats came together at this time and agreed to this package. Learn more about WOTC or these other tax credits If you'd like to learn more, then listen to our on-demand WOTC webinar because our experts answer common questions, such as…
- What is WOTC?
- How does WOTC help your organization?
- What you need for a successful program?
Plus, download our free eBook or listen to our podcast. As a result, you'll be able to uncover what WOTC myths might be holding back your company from maximizing this impactful credit! Ready to start WOTC? Then, sign-up for a live demo today so you can see our proprietary technology in action.