Capitol Insights: WOTC remains positioned for potential fall tax package

Capitol Insights covers federal policy developments that could affect the Work Opportunity Tax Credit (WOTC) and related workforce programs. While legislative priorities can shift, our goal is to provide timely updates and practical context as Congress considers tax and workforce policy.

At a glance:

• Congress has begun its August recess and is scheduled to return September 14.
• Senate Finance Committee Republican tax staff continue to indicate WOTC is expected to be considered as part of a bipartisan tax package.
• Congressional offices, committee staff, and stakeholders are expected to continue advancing tax priorities during the recess.
• Government funding legislation and the post-election lame duck session remain the most likely opportunities for tax legislation this year.
  
  

Congress has adjourned for its August election-year recess, but work on potential tax legislation is expected to continue ahead of lawmakers' return on September 14. Recent indications suggest that congressional tax writers continue working toward a bipartisan tax package before the end of the year, with Senate Finance Committee Republican tax staff reportedly expecting the Work Opportunity Tax Credit (WOTC) to be included if that package advances.

While no legislative package has been finalized, these developments represent one of the clearest indications to date that WOTC remains under active consideration as lawmakers refine year-end tax priorities. Throughout the recess, committee staff, congressional offices, and stakeholders are expected to refine priorities and prepare for the fall legislative agenda.

Bipartisan support continues

WOTC continues to receive bipartisan support in both chambers of Congress. Senators Bill Cassidy (R-LA) and Maggie Hassan (D-NH) remain engaged in advancing Senate legislation, while Representatives Lloyd Smucker (R-PA) and Steven Horsford (D-NV) continue leading House efforts to renew the program.

Recent action by the Senate Finance Committee to approve a package of noncontroversial IRS administrative reforms highlights that bipartisan tax work remains active. Alongside cryptocurrency tax provisions and technical tax corrections, WOTC remains among the provisions expected to be considered if a broader tax package advances later this year.

Attention turns to the fall legislative calendar

When Congress returns in September, lawmakers are expected to focus first on government funding legislation ahead of the new fiscal year. With a compressed legislative calendar and limited time before the November elections, those negotiations will likely shape the remaining legislative agenda before attention shifts to additional tax priorities. If a bipartisan tax package advances later this year, it could move as part of broader legislation or during the post-election lame duck session, when Congress often considers remaining priorities before adjourning for the year. Although the legislative timeline remains fluid, WOTC remains well positioned for consideration should year-end tax legislation move forward.

Looking ahead

Activity surrounding potential year-end tax legislation is expected to continue throughout the August recess as lawmakers and stakeholders prepare for Congress's return in September. We'll continue monitoring legislative developments and provide updates as additional information becomes available.

As Congress considers potential year-end tax legislation, employers should continue WOTC screening activities to preserve potential eligibility should the program be renewed, or retroactive enhancements be enacted.