Capitol Insights: Lawmakers push to extend and expand WOTC amid tight labor market
Capitol Insights shares weekly updates on the federal activity that influences hiring, compliance, and the Work Opportunity Tax Credit.
Latest Update
In our last Insight, we covered Senator Bill Cassidy’s proposal to expand the Work Opportunity Tax Credit to include military spouses, a change aimed at reducing persistent unemployment challenges for military families.
Read Week 6 here .
At a glance:
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Lawmakers introduced new bipartisan legislation to extend and strengthen WOTC.
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The Improve and Enhance WOTC Act appears in both chambers as H.R. 6231 and S. 3265.
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Provisions include expanded eligibility, increased credits, and inflation indexing.
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Employer groups are actively lobbying for renewal due to ongoing labor shortages.
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With funding expiring January 30, upcoming negotiations could carry WOTC forward.
Efforts to prevent the expiration of the Work Opportunity Tax Credit (WOTC) are gaining momentum as lawmakers and employer advocates join forces. WOTC, a bipartisan tax incentive for businesses that hire veterans, ex-offenders, and individuals receiving needs-based benefits, is currently set to expire at the end of the year.
Key developments
New legislation introduced:
The Improve and Enhance WOTC Act has been introduced as H.R. 6231 in the House and S. 3265 in the Senate. Sponsored by Sen. Bill Cassidy (R-La.) and Rep. Lloyd Smucker (R-Pa.), the bill would:
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Extend WOTC for five years and index its value to inflation.
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Increase maximum credits for employees working 400+ hours.
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Remove the age cap for food assistance recipients.
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Expand eligibility to businesses hiring military spouses.
Broadening support:
The bill incorporates enhancements from previous proposals and has bipartisan backing from lawmakers including Reps. Steven Horsford (D-Nev.), Don Beyer (D-Va.), and Mike Kelly (R-Pa.).
Industry advocacy:
Groups like the National Retail Federation are ramping up lobbying efforts, citing WOTC’s importance in offsetting training costs and addressing workforce shortages. Retail, grocery, and restaurant executives recently met with Senate Majority Leader John Thune and key tax writers to push for action.
Why it matters
WOTC helps employers bring on workers who face barriers to employment, while easing labor shortages in critical sectors. With the government funded only through January 30, lawmakers may use upcoming negotiations on tax extenders and health care subsidies as vehicles for WOTC renewal.
Next steps
Stakeholders expect discussions to intensify as Congress works toward a full-year funding bill in January. Advocacy remains crucial to ensure WOTC is included in any legislative package.
Employers interested in understanding how these WOTC updates may affect their hiring and compliance strategies can reach out to a Maximus WOTC specialist for personalized guidance.
