Earlier today, the US Senate voted overwhelmingly (96 for, 3 against) to take up HR 3474, the Expiring Provisions Improvement Reform and Efficiency (EXPIRE) Act.
This procedural vote of cloture means that a final vote on the bill may be coming soon. In the mean time, amendments will be considered and negotiations concluded. We anticipate a vote on the floor of the Senate as early as this week.
Of course, passage by the Senate does not make it law. It must still pass before the House of Representatives where support is not so dramatic. The overwhelming support for this bill in today’s cloture vote, however, bodes well for a strong passage by the Senate. This unexpectedly high level of support in the Senate may in turn become a persuasive message to our Republican leadership in the House.
The language of this tax extenders bill will renew the Work Opportunity Tax Credit (WOTC) and Empowerment Zone tax incentives (and numerous other programs) through 2015. It also includes an expansion of WOTC by adding a new target group — the Long-term Unemployment Recipient. To be precise:
The term qualified long-term unemployment recipient means any individual who is certified by the designated local agency as being in a period of unemployment which– (A) is not less than 27 consecutive weeks, and (B) includes a period in which the individual was receiving unemployment compensation under State or Federal law.
This definition is more restrictive than the original version included in an earlier draft of this bill. For one, the required length of unemployment is longer – a minimum of 27 instead of 26 weeks. Moreover, the new employee must have received unemployment compensation benefits at some time during that 27-week period. Finally, the individual must be currently unemployed at the time of hire and the 27 weeks must be consecutive, leading up to the hire date.
The consecutive-weeks requirement is troubling because it could produce inequitable results for many people. It depends on how strictly the language will be interpreted by the IRS. If the word “unemployed” means no work at all, it would rule out struggling but responsible individuals who have accepted even the most temporary work opportunities.
Consider this in light of the 2010 HIRE Act’s payroll tax exemption. If you recall, the HIRE Act provided a benefit to employers when they hired individuals who had been unemployed for at least 60 days. Even though the unemployment requirement was much shorter, a person could still have worked up to 40 hours during that period and still be considered unemployed for purposes of the tax benefit.
[This post was updated with minor corrections 05/16/2014]
Paul Suplizio, President of the WOTC Association, reported on the Senate’s cloture vote this morning. The following is published here with permission.
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From: “Paul Suplizio” <wotc@cox.net>
Date: Tue, May 13, 2014 9:47 am
Subject: Senate Votes To Advance Tax Extenders Bill
May 13, 2014
The Senate voted 96-3 today to take up H.R. 3474, the tax extenders bill.
This success is largely due to efforts of new Finance Committee Chairman Ron Wyden and his team for reaching out to every senator to accommodate their interests in the bill. Since the bill was approved by the Finance Committee on April 3rd, Senator Wyden has been actively reaching across the aisle to Republicans to gain their support.
Majority Leader Reid, Minority Leader McConnell, and the bill’s managers, Senator Wyden and Senator Hatch, can now determine which amendments, if any, will be voted on and move to final passage of the bill.
We will be watching for amendments that may impact WOTC—so far there are none, but Senator Coburn, who voted against the bill, has made WOTC a target in the past.
Those of us in touch with Speaker Boehner, Chairman Camp, or others in the House leadership can note the overwhelming vote in the Senate and urge the House to move on the bill when it comes before them.
It’s understood the House will want to make changes—what’s important is that they bring a bill to the floor soon to provide certainty to taxpayers and boost the economy.
The biggest risk at this point is for House Republicans to sit on the bill till after the election because they cannot get the President to agree to something they want, in particular, terminating the medical device tax imposed by the Affordable Care Act. Repealing this tax is a high priority for Republicans and we know it’s one of the amendments Senator Reid is being asked to allow a vote on.
Many thanks to Coalition members who’ve been lobbying Senate Republicans non-stop for two years to get WOTC extended and made permanent in tax reform. The job isn’t finished but you can see your efforts are paying off.
PAUL E. SUPLIZIO
President, WOTC Coalition
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