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Tax Credits Blog

If you want WOTC to continue, now is the time to act

November 5, 2014

 

What happens to WOTC and other tax extenders now is up to Senator McConnell and Speaker Boehner—we’ll know their minds soon because they can’t duck a decision at this date.  McConnell and Boehner need to get the extenders out of the way so they can start the new Congress  with a big push on tax reform and other Republican priorities.

Senior staffs are still assuring everyone an extenders bill will be top priority when Congress returns on November 12th.  That’s a frail basis for optimism because the two leaders who count haven’t decided the route they’ll take to get an extenders bill through the House.  It isn’t a slam-dunk because many House conservatives oppose extenders as “special interest” carve-outs adding $700 billion to the deficit over ten years.

 

The fastest route is for the House to pass the Senate EXPIRE bill—this works best for WOTC, but House leaders will have to corral Republicans who object to the Senate package as crony capitalism and a deficit raiser. 

 

Another route is for McConnell and Boehner to negotiate a package the House will agree to.  This poses a danger—the House might insist on passing only a handful of “must-do” extenders like the mortgage relief exclusion, state sales tax deduction, R&D, etc, and defer the remainder to a tax reform bill that won’t be voted till July at the earliest.  If they start negotiating, we’ve got to assure WOTC is on their “must-do” list.

 

Senator McConnell has always voted for the full package of EXPIRE extenders and went to the floor not long ago to support them publicly.  On the other hand, Speaker Boehner and Chairman Camp support some extenders and not others—they’ve already passed bills making permanent fifteen extenders they support, and WOTC isn’t one of them.

 

The political difficulty is that Speaker Boehner has to placate members who complain regularly that extenders are a boondoggle, crony capitalism, and a drain on Federal revenue.  He won’t chance a split in his caucus after a successful election and leadership contests ahead in January, so culling the list of extenders, lowering their cost, and telling his members, “This tax extenders bill will be the last” (due to tax reform) could happen.

In sum, we have to work plenty hard starting now to get Senate Republicans to join with Democrats to pass the bi-partisan EXPIRE bill when they return, and House Republicans to pass the Senate bill when it comes before them.  By going all-out to press the case for passing EXPIRE “as is” in both houses, we’ll have the best chance of forestalling a negotiation that might not turn out in our favor.

 

PAUL E SUPLIZIO

President, WOTC Coalition

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Update from the person in the know about WOTC

Here's an update on the WOTC program from Paul Suplizio, President of the WOTC Coalition (http://www.wotccoalition.org)

 

Ken, odds are good for Senate to pass a two-year retroactive extension when they return in November. Situation in House is uncertain--strong conservatives can try to block an extenders bill but it will pass if the Speaker will allow a vote of the full House as he did last time. Odds are we'll pull through by December 12. I'll put you on our e-mail list to receive our reports to keep you up to date.

 

Paul

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No new news since they've come back from vacation

Apparently the Congress has more pressing issues than WOTC and EZ so we're not hearing any jungle drums about the extensions from them.  We are, however,hearing from states that are rolling out new online systems (New Mexico, Michigan) to capture WOTC enrollments, states are indicating that there may be a "look back" period where companies can submit hires in 2014 that they hadn't submitted before so we're still bullish tha the programs are in the pile.  It may take until after the midterm elections to get the signatures needed but confidence levels are high.  How do you think Walmar, GM and HomeDepot and other huge corporations would like to take an earnings hit because they don't get their credits?  Not very likely - so we have the lobbying power of these companies behind us.

 

Don't stop sending in forms - those that make the 28 day window will be the first reviewed one the programs are re-authorized.  In a worse case scenario, its only costing some time on the new hires orientation and $.49 stamps.  Better safe than sorry.

 

If you have any questions, call me.

 

Ken Brice

609-252-0044

 

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New NY Tax Credit for Hiring Veterans

New employer tax credit could get younger veterans to work


 
The New York State Division of Veterans' Affairs is promoting a new tax credit to incentivize employers to hire New York's post-9/11 veterans.Post-9/11 veterans, since 2009, have had the highest unemployment rate in the nation — higher than those of their older counterparts and far above the general population, according to the United States Bureau of Labor Statistics."All New Yorkers owe a special debt of gratitude to the brave men and women of the U.S Armed Forces who have served in the years since 9/11," Gov. Andrew Cuomo said. "There are approximately 75,000 post-9/11 veterans living in New York state today. These brave men and women served our country, now it's our turn to help them get back to work.
 
"The state has allocated $74 million to provide tax breaks that can be applied against the taxes of any private business that hires a post-9/11 veteran after Jan. 1, 2014 and before Jan. 1, 2017, to a full-time position of at least 35 hours a week for at least a year.The amount of the tax credit equals 10 percent of the gross wages paid to a non-disabled veteran, and 15 percent of the gross wages paid to a disabled veteran, for the first year of employment, according to the state Tax Department.The credit is capped at $5,000 for non-disabled post-9/11 veterans and at $15,000 for disabled post-9/11 veterans. It is a one-time credit applied against the 2015 and 2016 franchise tax years; however, any credit not used by an employer can be carried forward for three years.   
 
Another requirement of the credit is that the veteran employee must be a new hire who had been unemployed for at least six months prior. The new policy prohibits employers from firing an employee to replace them with a veteran to receive the credit. Assemblyman Michael Benedetto, chair of the Assembly's Committee on Veterans' Affairs, said the new policy is based on the "Job for Heroes" legislation the Independent Democratic Conference introduced back in Feburary. Senate bill 3043 is sponsored by Sen. David Carlucci, D-Clarkstown, and has 10 co-sponors. There is no same as bill in the Assembly.
 
"The governor saw the value of the bill and included it in the budget and it was passed last March when we improved the state budget," said Benedetto, D-Bronx.Benedetto said at the time he was in the process of introducing a bill identical to the IDC's but didn't get a chance to because the governor included the policy in the budget."It is quite possible [my] bill was ready to be filed when the governor included [Jobs for Heroes] in the budget," he said. "The credit will partially solve a problem we have across the state of veteran populations who are unemployed.
 
"The unemployment rate for post-9/11 veterans, as of this year, sits at 10 percent nationwide, according to the Governor's Office. The rate for post-9/11 veterans under age 25 is 10.5 percent.Benedetto attributes this to a lack of communication between veterans and employers as to what vets were trained to do in the Armed Forces and how their skills fit in with private sector jobs.
 
"[There's] a bad perception out there among some business people that vets have issues…they think they may not be trained properly for the jobs and unfortunately none of this is really true. Veterans have proven themselves to be hard working, reliable, and well trained," Benedetto said.Cuomo, in 2011, launched the "Experience Counts" campaign to facilitate the transfer of military skills to the public and private sectors. Today, the hire-a-vet credit is one of many initiatives to ease veterans' transition to the civilian workforce.
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Still waiting for WOTC

We're still waiting for the tax extensions to come up in congress and get voted on.  In the 15 years I've been doing this, they've ended and been extended 5 times.  We have all the confidence it will be extended again if not made into tax law.  For all those who are taking advantage of the program, keep sending your forms in - remember the 28 day window!  The states will accept them if they're filed witin the 28 days although they won't act on them until the program is extended.  Stay posted.

Ken Brice

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