Weekly Legislative Update - January 23, 2018
Bi-Partisan Senate "Global Agreement"
Opens Route For Tax Extenders On Omnibus Bill
The Senate's vote yesterday for a Continuing Resolution to reopen the government follows a bi-partisan "global agreement" to work on an omnibus appropriations bill between now and February 8, aimed at funding government agencies, community health centers, disaster relief, opioid addiction, and much else.
A catch-all bill will almost inevitably lead to inclusion of some tax law changes, such as errors and anomalies in the Tax Cuts and Jobs Act that have come to light.
Thus, chances are good for Senate Finance Committee Chairman Orrin Hatch to mark up the Tax Extender Act of 2017 that he and his Republican colleagues introduced on December 21st.
That markup, if it comes about, presents interesting possibilities that are worth weighing as we seek the best way forward for WOTC.
The year 2025 is a critical year for the tax code because 23 major provisions of the Tax Cuts and Jobs Act must be extended (see list of expiring provisions at www.jct.gov. )
There would be an advantage for Congress to extend, this year, all provisions expiring in 2016-2024, to the end of 2025. The advantage is that Congress would not have to act again on extenders for another seven years when, inevitably, it must act.
Under this plan, WOTC would be extended for six years beyond its current expiration date of December 31, 2019.
Empowerment Zone tax credits and Indian Employment Tax Credit would be extended to the end of 2025, retroactive to the end of 2016.
Even if the Tax Extender Act of 2017 is brought to the floor without markup, the logic of extension to 2025 might appeal to Senate leaders. They understand the cost of temporary extension of current programs is zero because there's no increase in the deficit, and as the Senate is always short of time, not having to do another extenders bill till 2025 may be worth considering.
Our priorities would be WOTC extension through 2025, amended to include spouses of active duty service members, transitioning foster youth, and disconnected youth.
Another important priority is authorizing WOTC for private non-profit employers, thus opening up thousands of jobs in health care and education to WOTC workers. This costs nothing but makes WOTC more effective in helping disadvantaged workers obtain good jobs.
A last but not least priority is amending the tax code to allow any unused WOTC credits to be applied against FICA tax, with Treasury reimbursing the Social Security Trust Funds. This bookkeeping change assures continued employer outreach to, and hiring of, WOTC workers, while the cost to the Treasury is the same as if applied against income tax.
Your comments and recommendations are invited.