H.R.1177 - Improve and Enhance the Work Opportunity Tax Credit Act (119th Congress)
Summary
H.R.1177, the "Improve and Enhance the Work Opportunity Tax Credit Act," aims to modify the Internal Revenue Code of 1986 to enhance the Work Opportunity Tax Credit (WOTC). The bill seeks to encourage longer-service employment and modernize the credit to be more effective as a hiring incentive for targeted workers. It adjusts the calculation of the credit based on hours worked and removes the age limit for qualified Supplemental Nutrition Assistance Program (SNAP) benefits recipients.
Expected Effects
The bill would likely increase the utilization of the WOTC by employers, leading to more hiring of individuals from targeted groups. This could result in reduced unemployment rates among these populations. Removing the age limit for SNAP recipients would broaden the pool of eligible employees, potentially increasing their employment opportunities.
Potential Benefits
- Increased employment opportunities for targeted worker groups.
- Greater incentive for employers to retain employees for longer periods.
- Simplification and modernization of the WOTC program.
- Expanded eligibility for SNAP recipients, removing age restrictions.
- Potential reduction in reliance on public assistance programs.
Potential Disadvantages
- Increased complexity in calculating the tax credit due to tiered wage structures.
- Potential for employers to exploit the system by hiring individuals solely for the tax credit.
- Administrative burden on employers to track employee hours and eligibility.
- Possible displacement of non-targeted workers.
- Potential revenue loss for the government due to increased tax credit claims.
Constitutional Alignment
The bill appears to align with the Constitution's general welfare clause (Preamble). Article I, Section 8 grants Congress the power to lay and collect taxes, duties, imposts, and excises, to pay the debts and provide for the common defense and general welfare of the United States. The WOTC, as amended by this bill, falls under this power as it uses tax incentives to encourage employment and reduce reliance on public assistance, potentially promoting the general welfare.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).