The Work Opportunity Tax Credit (WOTC) (CRS Report for Congress)
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| Release Date |
Revised Feb. 4, 2013 |
| Report Number |
RL30089 |
| Report Type |
Report |
| Authors |
Christine Scott, Specialist in Social Policy |
| Source Agency |
Congressional Research Service |
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Summary:
Two income tax credits - the Work Opportunity Two income tax credits - the Work Opportunity Tax Credit (WOTC) and theWelfare-to-Work (WtW) tax credit - intended to encourage for-profit employers tohire from groups that experience difficulties in the labor market both in good and badeconomic times most recently expired on January 1, 2004, after the 108th Congresswent out of session without taking action. On September 23, 2004, the House andSenate agreed on the conference report for H.R. 1308 (the Working Families TaxRelief Act of 2004, P.L. 108-311), which among other things provides a two-yearextension of the otherwise unmodified employment tax credits (from January 1, 2004through December 31, 2005). This mirrors past congressional action after the creditshad expired for shorter periods of time.This report explains what type of subsidies these tax provisions are and refersto criticisms of their immediate predecessor, the Targeted Jobs Tax Credit, withwhich they share features. It then moves on to a detailed description of the WOTCand WtW credit (e.g., target groups, subsidy rate, retention period, and certificationprocess). Next, activity under the programs as well as their costs are presented. Thereport closes with a brief legislative history and a discussion of current policy action.
