Will WOTC be Extended?

While Congressional leaders in both parties hope to work on passage of the annual tax extenders, including the Work Opportunity Tax Credit (WOTC) in the coming months, passage may prove difficult as the committees of jurisdiction -- the House Committee on Ways and Means and the Senate Committee on Finance -- are focused on a full-year extension of Emergency Unemployment Compensation Benefits and the Social Security payroll tax cut. House Ways and Means Committee Chairman Dave Camp (R-MI) and Senate Finance Committee Chairman Max Baucus (D-MT) are playing key roles in the payroll tax cut and unemployment insurance extensions, leaving little time for other tax matters. A conference committee faces a February 29 deadline to produce an agreement.

The Work Opportunity Tax Credit expired on December 31, 2011 for non-veterans. State Workforce Agencies administer the credit and although it has lapsed, it is likely, given its 20 plus year history, to be extended by Congress along with other expired tax provisions at some point in 2012. It remains unclear when Congress may act, but state workforce agencies are encouraged to continue collecting and certifying WOTC recipients. It is likely the U.S. Department of Labor (USDOL) will issue guidance in the next several weeks.