Tax Alert: Bill to Extend WOTC, IEC, FEZ, and Disaster Relief Passes Senate Vote

The bipartisan spending bill, that passed in the House of Representatives on Tuesday, has now also passed in the Senate. This is a huge step toward finalizing the spending package and the included tax credit extenders. As discussed in the Alert earlier this week, this bill would extend the Work Opportunity Tax Credit (WOTC) through December 31, 2020 and retroactively extend the Federal Empowerment Zones Program (FEZ) and Indian Employment Credit (IEC) from January 1, 2018 through December 31, 2020. Also included are Disaster Relief Tax Credits for employers who continued to pay employees working in locations in areas affected by certain major disasters declared in 2018 and 2019 and an extension of the Tax Cuts and Jobs Act-created Paid FMLA credit.

Additionally, the bill includes a $2.5 million increase in WOTC funding for the 2020 extension year. The additional funding is meant to support the state-level administration of the programs and reduce backlogs of pending certifications at the state level.

We will continue to monitor the bill’s progress to ensure you are aware of its passage, which is anticipated this week so as to avoid a government shutdown when the current continuing resolution funding expires after this Friday.

We look forward to continuing to partner with you to ensure that you are aware of and utilizing all of the benefits available in tax credit programs. If you have any questions on the programs discussed in this alert and how they might impact you, please contact your First Advantage Tax Consultant or your legal counsel.