The Finance Committee of the U.S. Senate has passed a two-year extension of more than 50 federal tax breaks that expired at the end of 2014--and the proposal includes new help for those who have exhausted unemployment compensation benefits.

Among the tax breaks to be extended is the Work Opportunity Tax Credit (WOTC), which encourages employers to hire and retain veterans and others who face significant barriers to employment.

A committee amendment to the bill would expand WOTC eligibility to employers who hire individuals who have used up regular state and federal compensation benefits. 

Employers would be eligible for a 40% credit on the first $6,000 of wages paid to those individuals, for a maximum credit of $2,400 per eligible employee. Under WOTC rules, there is no limit on the number of individuals an employer can hire to qualify to claim the tax credit.

Businesses see the WOTC as a valuable tool to help them both reduce the cost of hiring employees and help unemployed workers rejoin the workforce.

Each year, employers in the U.S. claim over $1 billion in tax credits under the WOTC program.

While the bill had strong bipartisan support in the Senate committee, the House has yet to address extending the tax credits and it is uncertain whether final legislation would include the WOTC expansion.

For more information, contact CBIA’s Eric Gjede at 860.244.1931 | | @egjede