Bipartisan House Appropriations Committee leaders, (Rosa DeLauro, D-CT and Kay Granger, R-TX) and Senate counterparts (Patrick J Leahy, D-VT and Richard C Shelby (R-AL), have announced agreement on the top-line budget numbers for each of the twelve spending bills included in the pending Omnibus Appropriations for Fiscal Year 2022, currently scheduled for enactment by March 16th.
Depending on actions by House Speaker Nancy Pelosi and Senate Majority Leader Charles Schumer, along with President Biden’s input, much more funding and tax law can be added to the bill, even turning it into a reconciliation bill that can pass the Senate by simple majority.
Whatever comes out, the Hill is now a fury of activity. Democrats see a chance to restore some of the Party’s agenda, such as universal pre-school and climate change. You’ll see Democratic senators and a few Republicans working furiously to save the Child Credit; and Republican, supported by a few Democrats, equally determined to hold the line on debt and inflation.
Our goals haven’t wavered, we support the same plank we announced last March. Only now, because of the Omicron variant, our nation faces the prospect of more thousands of small business closures and bankruptcies. Hence, our immediate tasks:
We’re looking for an Omnibus Reconciliation bill because the COVID-19 emergency continues and we must face it. In the legislative swirl there’ll be snags and compromises, let’s work to overcome them.
S. 630, Senator Casey. A bill to amend the Internal Revenue Code of 1986 to include individuals receiving Social Security Disability Insurance benefits under the work opportunity credit, increase the work opportunity credit for vocational rehabilitation referrals, qualified SSI recipients, and qualified SSDI recipients, expand the disabled access credit, and enhance the deduction for expenditures to remove architectural and transportation barriers to the handicapped and elderly.
S. 1560, Senator Durbin. Disconnected Youth target group established for ages 16-25, and foster youth, doubles the maximum wage for summer youth ages 16-17m expands summer youth program to include year-round employment, and requires youth who are in school to work no more than 20 hours a week.
S. 784, Senator Wyden. Jobs for Economic Recovery Act. This is the two-year “Enhanced Work Opportunity Credit”, also introduced as H.R. 3449 by Congressman Tom Suozzi under the title “Hiring Incentive To Return Employment Act (HIRE Act), “To amend the Internal Revenue Code of 1966 to make certain adjustments to WOTC to modernize the credit and make it a more effective hiring incentive.
S. 1532, Senator Kaine. Jobs and Childcare for Military Families Act. Allows an employer a work opportunity tax credit for hiring an individual who is certified by a designated local agency as being, as of the hiring date, the spouse or domestic partner of a member of the Armed Forces, and requires the creation of programs for uniformed services families to pay for childcare on a pretax basis.
S. 212, Senator Cardin. Access Technology Affordability Act. The bill allows a refundable tax credit equal to the amounts paid for qualified access technology for use by a blind individual who is the taxpayer, the taxpayer’s spouse, or a dependent of the taxpayer.
TIA & WOTC Coalition. Bill to renew the Employee Retention Credit of 2021 from October 1, 2021 through June 30, 2022
TIA & WOTC Coalition. Bill to delete the current age cap (forty years) from the SNAP recipients WOTC target group, making SNAP recipients of all ages eligible for WOTC.
TIA & WOTC Coalition. Bill to extend WOTC to private non-profit employers, with credits allowed against payroll tax.
TIA & WOTC Coalition. Bill to allow excess certified WOTC credits to be claimed against payroll tax.
TIA & WOTC Coalition. Supporting certain Bills passed in House version of Build Back Better Act, including (certain Coalition members may not support due to cost):
The Honorable Ron Wyden
Chairman, Committee on Finance
United States Senate
Washington, DC 20510
Dear Mr. Chairman:
With strong demand driving the nation’s economy and the Federal Reserve Bank of Atlanta predicting nine percent GDP growth in the final quarter of the year, labor supply remains one of our most serious economic problems. Your bill calling for a work opportunity credit with increased benefits for the next two years can deal powerfully with major problems like COVID-19’s continued disincentives to work, skill shortages, and employers’ rising costs from inflation.
We are writing to recommend two proposals which, if adopted, can greatly increase the effectiveness of a beefed-up work opportunity credit. First, the more people Congress makes eligible for WOTC—and there are millions who deserve to be eligible as our economy has evolved—the more WOTC jobs will increase as employers train their sights on hiring from additional target groups, perhaps even improving the quality of hires.
TIA and the Work Opportunity Tax Credit Coalition has identified deserving multi-million-size groups which have characteristics to qualify them as new WOTC target groups, such as (1) persons receiving cash Social Security Disability benefits; (2) persons defined in Senator Durbin’s bill for disconnected youth and foster youth target groups; (3) allowing persons in existing WOTC target groups to work for private non-profit employers, mostly in health care and education and with plentiful good jobs; (4) persons older than 40 who are receiving SNAP benefits can be made eligible for WOTC, which would be a boon for older workers (no good reason exists for disallowing WOTC for SNAP recipients older than 40); (5) 600,000 spouses of military service members being shunned by many employers due to their short job tenure from relocation; (6) homeless people are long-overdue for designation as a WOTC target group to help so many of the driftless of all ages find a job.
(We do not advise a target group based on income level. That was tried forty years ago and found to be too complicated, costly, and time-consuming.)
Congress should designate these new target groups now, in the present workforce crisis, with prices and wages rising and the number of people employed still 5 million from pre-pandemic levels our country would have around 30 million more WOTC-eligible people, and an estimated two or three million new hires derived from stronger employer outreach to workers and choice among a broader range of aptitudes.
Employee adjustment to new target groups is simple and virtually costless: a worker checks a box on an IRS form, usually during job application, indicating he or she meets the criteria for their target group, and submits the form to as many employers as he or she wishes with job application; all else follows current law.
Our second recommendation is that, for WOTC-eligible workers of current target groups, Congress should seek to assure that, once a worker is certified for the WOTC credit by the proper State Workforce Agency, the employer should be able to receive the financial benefit of the credit as soon as possible. Employers save cash when they use WOTC credits to reduce their income tax liability, and this additional cash flow is vital to any business. But if employers have no income tax liability or have more WOTC credits than their income tax liability, current law requires carrying forward the amount by which their WOTC credits exceed their income tax liability.
This defers for an uncertain period the receipt of cash flow required by businesses to operate, especially small businesses, and so are disadvantaged by inability to liquidate their credits. It is not wise policy for government to require a business, especially during hard times to, in effect, lend cash to the Treasury. In such circumstances, we strongly advise that Congress authorize Treasury to allow certified WOTC credits to be claimed against payroll tax, so cash flow travels as speedily as possible to the taxpayer.
Thank you for the opportunity to bring these matters to your attention.
Sincerely,
TIA and the WOTC Coalition
On February 8th, the House voted to pass a temporary extension of an Omnibus Budget Appropriations bill to fund the government to March 11.
The reason for moving the date from February 18th to March 11th is to complete writing the bill. Basically, the bill to be voted today will have little change from the prior one.
Hopefully, appropriators will get the job done and we’ll finally have appropriations for the remainder of FY 2022.
We can expect the final bill in March to include funds for COVID-19 Omicron Relief, a slate of tax provisions, and extensions of expiring provisions.
Senator Ron Wyden (D-OR), chairman of the Senate Finance Committee, supports including the Employee Retention Tax Credit (ERTC) in the final Omnibus Appropriations bill. Senator Wyden’s colleague, Senator Michael D. Crapo (R-ID), the ranking Republican on the Finance Committee, is equally supportive.
We feel confident of majority support of Democrats on the Finance committee, but as Republicans as a body are inclined to oppose further spending that adds to the national debt while inflation is not yet under control, it’s important to contact Republican members of Finance to ask for their support, mentioning that Senator Crapo, the ranking Republican on the Finance Committee, is supportive, and ERTC is critically important to provide cash revenue to pay current and furloughed workers.
There is no decision at this point on the date another ERTC would be reauthorized or its terminated date. In the Senate, final decision on including ERTC will be made by the majority and minority Leaders, Senator Schumer and Senator McConnell.
Additionally, TIA is strongly supporting the Enhanced Work Opportunity Tax Credit with improved benefits for the next two years, as proposed by Congressman Suozzi and supported by the tax chairmen of Ways and Means and Finance.
Under enhanced WOTC, employers are supporting national workforce recovery by reaching out to hire more workers in large disadvantaged populations covering welfare and food stamp recipients, veterans (and hopefully soon, servicemembers’ spouses), people with disabilities (and hopefully soon, recipients of SSDI cash disability payments), residents of empowerment zones and recovering rural areas, the long-term unemployed, and other target groups.
WOTC would be more efficient if Congress allowed employers with excess credits to claim them against payroll tax. WOTC should also be allowed to private non-profit employers, opening many good jobs in health care and education.
There is also growing urgency for Congress to provide COVID-19 emergency assistance to small businesses and nonprofit organizations, such as restaurants, franchisees, gyms, and many others who besieging Congress for cash support to meet payroll and avoid bankruptcy.
Legislating this emergency aid is in different hands because ERTC is considered as tax law and appropriations considered in a different committee, the Senate Small Business & Entrepreneurship Committee, whose chairman is the very capable Senator Ben Cardin (D-MD), also a member of the Finance Committee. Republican Senator Roger Wicker of Mississippi is Senator Cardin’s colleague leading this effort.
So far, a healthy string of co-sponsors have thrown their weight behind this very important effort, and many WOTC Coalition members are joining because a business may be profitable, but without enough cash-flow they may collapse. These emergency funds go to small business and nonprofit companies, covering costs and staving off widespread bankruptcy.
ERTC and Emergency Aid are not the same thing, they complement each other. ERTC is an emergency short-term tax credit to ensure an employer can continue to make payroll for already-employed or furloughed workers.
WOTC is a long-term proven tax credit allowed employers who hire from twelve large, disadvantaged target groups; employers pay most of the wage or salary—the usual cost to the government is around $1,900.
Emergency aid, in the form of appropriated funds of the federal government, have the purpose of covering costs and preventing widespread bankruptcy of firms at risk in the entire population of small businesses and nonprofit companies.