Tax Alert: New Bill Proposes Expansion of WOTC Program

The Helping to Encourage Real Opportunity (HERO) for Youth Act intends to increase access to employment opportunities for underserved youth, especially those impacted by the COVID-19 pandemic. This bill proposes important potential tax credits, which we will be monitoring for any future legislative action.

The HERO for Youth Act would create a new tax credit of up to $2,400 for businesses that hire and train employees who are 16-24 years old, out of school, and out of work, and also create a new tax credit for businesses that hire and train employees who are 16-21 years old and are either currently in foster care or have aged out of the foster care system.

Importantly, the bill would also expand the summer youth category within the Work Opportunity Tax Credit (WOTC) program, which provides a tax credit to businesses that hire 16-17 year olds for the summer who are enrolled in school, and live in Empowerment Zones. The proposed expansion would double the amount of the credit (up to a maximum of $2,400) and would expand the category to include year-round employment.

As always, we at FADV will continue to monitor these new bills for future legislative action. Please ensure you are subscribed to our Tax Alerts to stay informed! 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.