Work Opportunity Tax Credit Coalition

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Budget & Appropriations


WOTC Coalition will have to justify making WOTC permanent at a 10-year cost of $19 billion, and the question will again confront us, "Why should WOTC be continued, given the size of the Federal deficit?" The short answer is, "There is no more efficient way of achieving equal opportunity for all who come to the jobs market." With our members' help, we are preparing to meet this challenge and aim to secure a permanent authorization for WOTC, likely in a government funding bill in December.

In a separate bill, approximately $18 million is appropriated by Congress to the Department of Labor to administer the Work Opportunity Tax Credit program. Most of these funds are allocated as grants to State Workforce Agencies for their work certifying that hires are eligible for the tax credit. The state's certification that a worker falls within one of the groups eligible for WOTC becomes the basis for his or her employer's claim for the tax credit on the company's tax return. State Workforce Agency certification is the main reason the WOTC program has been very free from fraud and abuse.

Within this $18 million, some funds are provided to implement the electronic filing of employer certification requests. Still, there's little to publicize and educate the majority of employers who remain unaware of WOTC. Promotion funds are important to make more businesses aware of WOTC, especially in rapidly growing sectors like healthcare, or where small businesses predominate, like construction. Publicizing secures more job opportunities for workers. Your Coalition's task is to assure that sufficient funds for WOTC administration are provided when the House and Senate Appropriations Committees write the annual Department of Labor Appropriations bill. Thus we support Federal funds for State Workforce Agency operations as well as for WOTC specifically.

Working on Budget

Inadequate funding has, over the years, resulted in growing backlogs and delays in processing certifications, depriving employers timely access to their credits, which are an important source of liquidity and business spending that benefits your state's economy. Thus, delays can result in less employer interest and fewer WOTC jobs. Today, a few states are a year behind in processing employer requests for certification.

When we made a case for additional resources to implement a Nationwide Electronic Filing System (NEFS) to be used to submit employers' requests to certify eligible workers, Congress provided initial funding. The NEFS has long been advocated by the Coalition as a faster and less costly means, via paperless transactions, of handling submission of requests for certification and timely issuance of certifications. The Internal Revenue Service has signed off on the system, but it's still not fully implemented because of limited funds. We are continuing to press Congress for the IT resources States need for full implementation nationwide, as well as to promote and educate employers on WOTC.