Improve and Enhance the Work Opportunity Tax Credit Act

Bill: 119-s-492
Sponsor: full_name: Sen. Cassidy, Bill [R-LA]
Introduced: 2025-02-10
Policy area: Taxation
Latest action: action_date: 2025-02-10
text: Read twice and referred to the Committee on Finance.

Summaries:
action_date: 2025-02-10
action_desc: Introduced in Senate
text: <p><strong>Improve and Enhance the Work Opportunity Tax Credit Act </strong></p><p>This bill increases the work opportunity tax credit (WOTC) for wages paid during the first year of employment to certain employees. The bill also eliminates the maximum age limit applicable to Supplemental Nutrition Assistance Program (SNAP) benefit recipients for purposes of the WOTC.</p><p>Under current law, an employer generally may claim a WOTC in the amount of 40% of up to $6,000 (or of up to $24,000 for certain veterans, $3,000 for summer youth employees, and $10,000 for long-term family aid recipients) of qualified wages paid during the first year of employment to an employee who is a member of a targeted group. (Exceptions and limitations apply.)</p><p>The bill increases the WOTC to (1) 50% of up to $6,000 (or of up to $24,000 for certain veterans) of qualified first-year wages paid to an employee who is a member of a targeted group (other than a summer youth employee or recipient of long-term family aid), and (2) 50% of up to $12,000 (or of up to $48,000 for certain veterans) of qualified wages paid during the first year of employment to such employee if the employee works at least 400 hours during the year.</p><p>Finally, the bill eliminates the maximum age limit applicable to SNAP benefit recipients and, thus, allows an employer to claim the&nbsp;WOTC for qualified first-year wages paid to an employee who is at least 18 years old and&nbsp;receiving SNAP benefits for a certain period of time.</p>

tv_txt: II 119th CONGRESS 1st Session S. 492 IN THE SENATE OF THE UNITED STATES February 10, 2025 Mr. Cassidy (for himself and Ms. Hassan ) introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To amend the Internal Revenue Code of 1986 to improve and enhance the work opportunity tax credit, to encourage longer-service employment, and to modernize the credit to make it more effective as a hiring incentive for targeted workers, and for other purposes.

1. Short title This Act may be cited as the Improve and Enhance the Work Opportunity Tax Credit Act . 2. Improving and enhancing work opportunity tax credit (a) In general Section 51(a) of the Internal Revenue Code of 1986 is amended— (1) by striking shall be equal to 40 percent and all that follows and inserting the following: shall be equal to the sum of— (1) 50 percent of so much of the qualified first-year wages with respect to each individual for such year as does not exceed $6,000, plus (2) in the case of individuals who have performed at least 400 hours of service for the employer, 50 percent of so much of the qualified first-year wages with respect to each such individual for such year as exceeds $6,000, and does not exceed $12,000. . (b) Conforming amendments relating to limitation on wages taken into account for certain veterans Section 51(b)(3) of such Code is amended to read as follows: (3) Increased limitation on wages taken into account for veterans The $6,000 and $12,000 amounts under paragraphs (1) and (2) of subsection (a) shall be increased to— (A) $12,000 and $24,000, respectively, in the case of any individual who is a qualified veteran by reason of subsection (d)(3)(A)(ii)(I), (B) $14,000 and $28,000, respectively, in the case of any individual who is a qualified veteran by reason of subsection (d)(3)(A)(iv), and (C) $24,000 and $48,000, respectively, in the case of any individual who is a qualified veteran by reason of subsection (d)(3)(A)(ii)(II). . (c) Conforming amendments relating to individuals not meeting minimum employment periods (1) Subparagraphs (A) and (B) of section 51(i)(3) of such Code are each amended by striking subsection (a) and inserting subsection (a)(1) . (2) Section 51(i)(3)(A) of such Code is amended by striking 40 percent and inserting 50 percent . (d) Conforming amendments relating to treatment of summer youth employees Section 51(d)(7)(B) of such Code is amended— (1) by striking clause (ii), (2) by striking , and at the end of clause (i) and inserting a period, (3) by redesignating clause (i) (as so amended) as clause (v), and (4) by inserting before such clause (v) (as so redesignated) the following new clauses: (i) in lieu of the amount determined under subsection (a), the amount of the work opportunity credit determined under this section for the taxable year shall be equal to 40 percent of the qualified first-year wages for such year, (ii) in the case of an individual described in subsection (i)(3)(A), clause (i) shall be applied by substituting 25 percent for 40 percent , (iii) in the case of an individual described in subsection (i)(3)(B), no wages shall be taken into account under clause (i), (iv) the amount of qualified first-year wages which may be taken into account with respect to such individual shall not exceed $3,000 per year, and . (e) Conforming amendments relating to long-Term family assistance recipients (1) In general Section 51(e)(1) of such Code is amended by striking family assistance recipient— and all that follows and inserting the following: family assistance recipient, in lieu of subsection (a), the amount of the work opportunity credit determined under this section for the taxable year shall be equal to— (1) 40 percent of so much of the qualified first-year wages with respect to such individual for such year as does not exceed $10,000, and (2) 50 percent of so much of the qualified second-year wages with respect to such individual for such year as does not exceed $10,000. . (2) Clerical amendment The heading for section 51(e) of such Code is amended by striking Credit for second-year wages and inserting Special rules for determining credit . (f) Effective date The amendments made by this section shall apply to individuals who begin work for the employer after December 31, 2024. 3. Removal of age limit for qualified supplemental nutrition assistance program benefits recipient (a) In general Section 51(d)(8)(A)(i) of the Internal Revenue Code of 1986 is amended by striking but not age 40 . (b) Effective date The amendment made by this section shall apply to individuals who begin work for the employer after December 31, 2024.