HR 1177 — Improve and Enhance the Work Opportunity Tax Credit Act

Summary

Improve and Enhance the Work Opportunity Tax Credit Act This bill increases the work opportunity tax credit (WOTC) for wages paid during the first year of employment to certain employees. The bill also eliminates the maximum age limit applicable to Supplemental Nutrition Assistance Program (SNAP) benefit recipients for purposes of the WOTC.Under current law, an employer generally may claim a WOTC in the amount of 40% of up to $6,000 (or of up to $24,000 for certain veterans, $3,000 for summer youth employees, and $10,000 for long-term family aid recipients) of qualified wages paid during the first year of employment to an employee who is a member of a targeted group. (Exceptions and limitations apply.)The bill increases the WOTC to (1) 50% of up to $6,000 (or of up to $24,000 for certain veterans) of qualified first-year wages paid to an employee who is a member of a targeted group (other than a summer youth employee or recipient of long-term family aid), and (2) 50% of up to $12,000 (or of up to $48,000 for certain veterans) of qualified wages paid during the first year of employment to such employee if the employee works at least 400 hours during the year.Finally, the bill eliminates the maximum age limit applicable to SNAP benefit recipients and, thus, allows an employer to claim the WOTC for qualified first-year wages paid to an employee who is at least 18 years old and receiving SNAP benefits for a certain period of time.

Bill Text

• Introduced Introduced in House Current html February 10, 2025

AI-generated reading aid from the bill's amendatory text — verify against the official bill.

The bill enhances the Work Opportunity Tax Credit by increasing the percentage of qualified wages, adjusting wage limits for veterans, and removing the age limit for certain benefit recipients.

• Section 51(a)

  shall be equal to 40 percent → shall be equal to the sum of-- "(1) 50 percent of so much of the qualified first-year wages with respect to each individual for such year as does not exceed $6,000, plus "(2) in the case of individuals who have performed at least 400 hours of service for the employer, 50 percent of so much of the qualified first-year wages with respect to each such individual for such year as exceeds $6,000, and does not exceed $12,000."

  Increases the percentage of the credit from 40% to a tiered 50% based on wage thresholds.

• Section 51(b)(3)

  $6,000 and $12,000 → $12,000 and $24,000

  Increases the wage limits for the credit applicable to certain veterans.

• Section 51(b)(3)

  $6,000 and $12,000 → $14,000 and $28,000

  Increases the wage limits for the credit applicable to another category of veterans.

• Section 51(b)(3)

  $6,000 and $12,000 → $24,000 and $48,000

  Increases the wage limits for the credit applicable to a third category of veterans.

• Section 51(i)(3)(A)

  40 percent → 50 percent

  Increases the percentage of the credit for individuals not meeting minimum employment periods.

• Section 51(d)(7)(B)

  clause (ii)

  Removes a clause related to summer youth employees regarding their credit calculation.

• Section 51(d)(7)(B)

  , and → .

  Terminates a sentence to streamline language for summer youth employees.

• Section 51(d)(7)(B)

  the amount of the work opportunity credit determined under this section for the taxable year shall be equal to 40 percent of the qualified first-year wages for such year, → in lieu of the amount determined under subsection (a), the amount of the work opportunity credit determined under this section for the taxable year shall be equal to 40 percent of the qualified first-year wages for such year,

  Clarifies the credit amount calculation for summer youth employees.

• Section 51(d)(7)(B)

  the amount of qualified first-year wages which may be taken into account with respect to such individual shall not exceed $3,000 per year,

  Sets a cap on the wages for summer youth employees for the credit calculation.

• Section 51(e)(1)

  family assistance recipient-- → family assistance recipient, in lieu of subsection (a), the amount of the work opportunity credit determined under this section for the taxable year shall be equal to--

  Modifies the calculation base for family assistance recipients.

• Section 51(e)(1)

  40 percent of so much of the qualified first-year wages with respect to such individual for such year as does not exceed $10,000, and → 40 percent of so much of the qualified first-year wages with respect to such individual for such year as does not exceed $10,000, and (2) 50 percent of so much of the qualified second-year wages with respect to such individual for such year as does not exceed $10,000.

  Increases the credit percentage for second-year wages for family assistance recipients.

• Section 51(d)(8)(A)(i)

  but not age 40

  Removes the age limit for recipients of supplemental nutrition assistance program benefits.

Action History

1. February 10, 2025

   Introduced in House

2. February 10, 2025

   Introduced in House

3. February 10, 2025

   Referred to the House Committee on Ways and Means.

Sponsors

• Lloyd Smucker · Primary
• Steven Horsford · Cosponsor
• Brian K. Fitzpatrick · Cosponsor
• Thomas R. Suozzi · Cosponsor
• Mike Kelly · Cosponsor
• Vern Buchanan · Cosponsor
• Henry C. "Hank" Johnson · Cosponsor
• Carol D. Miller · Cosponsor
• Nicole Malliotakis · Cosponsor
• Jimmy Panetta · Cosponsor
• Claudia Tenney · Cosponsor
• Sarah McBride · Cosponsor
• Max L. Miller · Cosponsor
• Jefferson Van Drew · Cosponsor
• Joe Neguse · Cosponsor
• Tracey Mann · Cosponsor
• Eugene Simon Vindman · Cosponsor

Subjects