S 492 — 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 Senate Current html February 10, 2025

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

The bill modifies the Work Opportunity Tax Credit to increase credit percentages and wage limits for various categories of targeted workers.

• 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 Work Opportunity Tax Credit and changes the wage limits for eligibility.

• Section 51(b)(3)

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

  Increases wage limits taken into account for certain veterans.

• Section 51(i)(3)(A)

  40 percent → 50 percent

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

• Section 51(d)(7)(B)

  by striking clause (ii), → by inserting before such clause (v) (as so redesignated) the following new clauses: (i) 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, (ii) in the case of an individual described in subsection (i)(3)(A), clause (i) shall be applied by substituting `25 percent' for `40 percent', (iii) in the case of an individual described in subsection (i)(3)(B), no wages shall be taken into account under clause (i), (iv) 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, and

  Modifies the treatment of summer youth employees under the Work Opportunity Tax Credit.

• 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-- (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 (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.

  Changes the calculation of the Work Opportunity Tax Credit for family assistance recipients.

• Section 51(d)(8)(A)(i)

  but not age 40

  Removes the age limit for recipients of qualified Supplemental Nutrition Assistance Program benefits.

Action History

1. February 10, 2025

   Introduced in Senate

2. February 10, 2025

   Read twice and referred to the Committee on Finance.

Sponsors

• Bill Cassidy · Primary
• Margaret Wood Hassan · Cosponsor
• Christopher A. Coons · Cosponsor

Subjects