The Work Opportunity Tax Credit (WOTC) has employed more than 5,800,000 people in public assistance programs since 1996. Out of the 575,000 people hired in 2010, 145,000 people were certified in the Disconnected Youth category.
Last week, Congressmen Charles Rangel and Aaron Schock introduced the Work Opportunity Tax Credit Improvements Act of 2011 to renew the WOTC Act of 1996. It would assist discharged veterans and high-risk youth in gaining employment.
Rangel first introduced this program in 1977 as the Targeted Jobs Tax Credit. The current WOTC Act will expire on Dec. 31, 2011.
WOTC is a hiring incentive that offsets the higher costs of recruiting, hiring, retaining public assistance recipients and other low-skilled individuals. The retention incentive provides rewards for those who stay on the job the longest. Rangel said that the program has a positive impact. Both Republicans and Democrats have called for extensions of the program.
“In a time of rising economic distress, our disadvantaged youth and discharged veterans have difficulty finding employment,” Rangel said. “By renewing and simplifying the program, we’re sending a message to our youth and our heroic veterans that they are not on their own.”
Under the WOTC Improvements Act, tax credits to hasten employment for high-risk youth and discharged veterans would be reintroduced after those provisions were not renewed at the end of 2010. Hiring tax incentives-including an Indian hiring credit, D.C. hiring incentive and two credits for Empowerment Zone residents-would be consolidated and placed under the core WOTC program.
“America’s veterans and young people are important resources that we have,” Rangel stated. “Re-authorizing the Work Opportunity Credit and investing in our returning soldiers and high-risk youth will strengthen our great nation as they work hard and stay in the labor force, return to school and live productive lives. They’ll contribute to our communities, our country and help America win the future.”