Official Summaries

Improve and Enhance the Work Opportunity Tax Credit Act

This bill increases the work opportunity tax credit (WOTC) for wages paid during the first year of employment to certain employees. The bill also eliminates the maximum age limit applicable to Supplemental Nutrition Assistance Program (SNAP) benefit recipients for purposes of the WOTC.

Under current law, an employer generally may claim a WOTC in the amount of 40% of up to $6,000 (or of up to $24,000 for certain veterans, $3,000 for summer youth employees, and $10,000 for long-term family aid recipients) of qualified wages paid during the first year of employment to an employee who is a member of a targeted group. (Exceptions and limitations apply.)

The bill increases the WOTC to (1) 50% of up to $6,000 (or of up to $24,000 for certain veterans) of qualified first-year wages paid to an employee who is a member of a targeted group (other than a summer youth employee or recipient of long-term family aid), and (2) 50% of up to $12,000 (or of up to $48,000 for certain veterans) of qualified wages paid during the first year of employment to such employee if the employee works at least 400 hours during the year.

Finally, the bill eliminates the maximum age limit applicable to SNAP benefit recipients and, thus, allows an employer to claim the WOTC for qualified first-year wages paid to an employee who is at least 18 years old and receiving SNAP benefits for a certain period of time.

Current Full Text

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 492 Introduced in Senate (IS)]

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119th CONGRESS
  1st Session
                                 S. 492

 To amend the Internal Revenue Code of 1986 to improve and enhance the 
 work opportunity tax credit, to encourage longer-service employment, 
   and to modernize the credit to make it more effective as a hiring 
        incentive for targeted workers, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           February 10, 2025

Mr. Cassidy (for himself and Ms. Hassan) introduced the following bill; 
     which was read twice and referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
 To amend the Internal Revenue Code of 1986 to improve and enhance the 
 work opportunity tax credit, to encourage longer-service employment, 
   and to modernize the credit to make it more effective as a hiring 
        incentive for targeted workers, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Improve and Enhance the Work 
Opportunity Tax Credit Act''.

SEC. 2. IMPROVING AND ENHANCING WORK OPPORTUNITY TAX CREDIT.

    (a) In General.--Section 51(a) of the Internal Revenue Code of 1986 
is amended--
            (1) by striking ``shall be equal to 40 percent'' and all 
        that follows and inserting the following: ``shall be equal to 
        the sum of--
            ``(1) 50 percent of so much of the qualified first-year 
        wages with respect to each individual for such year as does not 
        exceed $6,000, plus
            ``(2) in the case of individuals who have performed at 
        least 400 hours of service for the employer, 50 percent of so 
        much of the qualified first-year wages with respect to each 
        such individual for such year as exceeds $6,000, and does not 
        exceed $12,000.''.
    (b) Conforming Amendments Relating to Limitation on Wages Taken 
Into Account for Certain Veterans.--Section 51(b)(3) of such Code is 
amended to read as follows:
            ``(3) Increased limitation on wages taken into account for 
        veterans.--The $6,000 and $12,000 amounts under paragraphs (1) 
        and (2) of subsection (a) shall be increased to--
                    ``(A) $12,000 and $24,000, respectively, in the 
                case of any individual who is a qualified veteran by 
                reason of subsection (d)(3)(A)(ii)(I),
                    ``(B) $14,000 and $28,000, respectively, in the 
                case of any individual who is a qualified veteran by 
                reason of subsection (d)(3)(A)(iv), and
                    ``(C) $24,000 and $48,000, respectively, in the 
                case of any individual who is a qualified veteran by 
                reason of subsection (d)(3)(A)(ii)(II).''.
    (c) Conforming Amendments Relating to Individuals Not Meeting 
Minimum Employment Periods.--
            (1) Subparagraphs (A) and (B) of section 51(i)(3) of such 
        Code are each amended by striking ``subsection (a)'' and 
        inserting ``subsection (a)(1)''.
            (2) Section 51(i)(3)(A) of such Code is amended by striking 
        ``40 percent'' and inserting ``50 percent''.
    (d) Conforming Amendments Relating to Treatment of Summer Youth 
Employees.--Section 51(d)(7)(B) of such Code is amended--
            (1) by striking clause (ii),
            (2) by striking ``, and'' at the end of clause (i) and 
        inserting a period,
            (3) by redesignating clause (i) (as so amended) as clause 
        (v), and
            (4) by inserting before such clause (v) (as so 
        redesignated) the following new clauses:
                            ``(i) in lieu of the amount determined 
                        under subsection (a), the amount of the work 
                        opportunity credit determined under this 
                        section for the taxable year shall be equal to 
                        40 percent of the qualified first-year wages 
                        for such year,
                            ``(ii) in the case of an individual 
                        described in subsection (i)(3)(A), clause (i) 
                        shall be applied by substituting `25 percent' 
                        for `40 percent',
                            ``(iii) in the case of an individual 
                        described in subsection (i)(3)(B), no wages 
                        shall be taken into account under clause (i),
                            ``(iv) the amount of qualified first-year 
                        wages which may be taken into account with 
                        respect to such individual shall not exceed 
                        $3,000 per year, and''.
    (e) Conforming Amendments Relating to Long-Term Family Assistance 
Recipients.--
            (1) In general.--Section 51(e)(1) of such Code is amended 
        by striking ``family assistance recipient--'' and all that 
        follows and inserting the following: ``family assistance 
        recipient, in lieu of subsection (a), the amount of the work 
        opportunity credit determined under this section for the 
        taxable year shall be equal to--
            ``(1) 40 percent of so much of the qualified first-year 
        wages with respect to such individual for such year as does not 
        exceed $10,000, and
            ``(2) 50 percent of so much of the qualified second-year 
        wages with respect to such individual for such year as does not 
        exceed $10,000.''.
            (2) Clerical amendment.--The heading for section 51(e) of 
        such Code is amended by striking ``Credit for Second-year 
        Wages'' and inserting ``Special Rules for Determining Credit''.
    (f) Effective Date.--The amendments made by this section shall 
apply to individuals who begin work for the employer after December 31, 
2024.

SEC. 3. REMOVAL OF AGE LIMIT FOR QUALIFIED SUPPLEMENTAL NUTRITION 
              ASSISTANCE PROGRAM BENEFITS RECIPIENT.

    (a) In General.--Section 51(d)(8)(A)(i) of the Internal Revenue 
Code of 1986 is amended by striking ``but not age 40''.
    (b) Effective Date.--The amendment made by this section shall apply 
to individuals who begin work for the employer after December 31, 2024.
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