FOR IMMEDIATE RELEASE, Contact: (202) 225-7601
June 24, 1999
No. OV-9
Congressman Amo Houghton (R-NY), Chairman, Subcommittee on Oversight of the Committee on Ways and Means, today announced that the Subcommittee will hold a hearing on the work opportunity tax credit (WOTC). The hearing will take place on Thursday, July 1, 1999, in the main Committee hearing room, 1100 Longworth House Office Building, beginning at 10:00 a.m.
Oral testimony at this hearing will be from invited witnesses only. Witnesses will include representatives from the U.S. Department of the Treasury, U.S. Department of Labor, and spokespersons for organizations knowledgeable about the operation of the WOTC. However, any individual or organization not scheduled for an oral appearance may submit a written statement for consideration by the Committee and for inclusion in the printed record of the hearing.
BACKGROUND:
The Small Business Job Protection Act of 1996 (P.L. 104-188) established the work opportunity tax credit, section 51 of the Internal Revenue Code. The objective of the WOTC is to provide employers an incentive to hire persons from certain disadvantaged groups. (The WOTC is a successor to the targeted jobs tax credit which served a similar function before 1996.) The WOTC is scheduled to expire after June 30, 1999. The WOTC is available on an elective basis for employers who hire persons from one of eight targeted groups. The credit equals 40 percent of the first $6,000 of qualified first-year wages for a person who works more than 400 hours. The credit is 25 percent of the first $6,000 in qualified wages for a person who works 400 hours or less.
The eight targeted groups are: (1) families eligible to receive benefits under the Temporary Assistance for Needy Families Program, (2) qualified veterans, (3) qualified ex-felons, (4) high-risk youths, (5) vocational rehabilitation referrals, (6) qualified summer youth employees, (7) families receiving food stamps, and (8) persons receiving certain Supplemental Security Income benefits.
The process for claiming the credit generally requires an appropriate State agency to certify that the prospective employee meets the eligibility standards for one of the targeted groups.
The current WOTC is applied as a credit against the employer's Federal income tax liability. Therefore, a non-profit or charitable employer, such as a university or hospital, receives no benefit from the credit because such employers generally are exempt from Federal income tax. However, non-profit employers may have a payroll tax liability for the employer's portion of the Social Security tax as do for-profit firms. The WOTC only applies against the regular income tax. It does not offset the alternative minimum tax (AMT), to the extent that the AMT exceeds the regular income tax.
In announcing the hearing, Chairman Houghton stated: "The work opportunity tax credit is one more way we're helping millions of families move from welfare rolls to payrolls. This tax incentive to encourage work is a key part of our plan to help even more low-income Americans escape poverty and enjoy the independence of employment and a career. I'm hopeful that the bipartisan support for this initiative will continue."
FOCUS OF THE HEARING:
The hearing will focus on the operation and effectiveness of the WOTC. The Subcommittee will review the desirability of extending the existence of the credit and ways in which it might be improved.
DETAILS FOR SUBMISSION OF WRITTEN COMMENTS:
Any person or organization wishing to submit a written statement for the printed record of the hearing should submit six (6) single-spaced copies of their statement, along with an IBM compatible 3.5-inch diskette in WordPerfect 5.1 format, with their name, address, and hearing date noted on a label, by the close of business, Thursday, July 15, 1999, to A.L. Singleton, Chief of Staff, Committee on Ways and Means, U.S. House of Representatives, 1102 Longworth House Office Building, Washington, D.C. 20515. If those filing written statements wish to have their statements distributed to the press and interested public at the hearing, they may deliver 200 additional copies for this purpose to the Subcommittee on Oversight office, room 1136 Longworth House Office Building, by close of business the day before the hearing.
FORMATTING REQUIREMENTS:
Each statement presented for printing to the Committee by a witness, any written statement or exhibit submitted for the printed record or any written comments in response to a request for written comments must conform to the guidelines listed below. Any statement or exhibit not in compliance with these guidelines will not be printed, but will be maintained in the Committee files for review and use by the Committee.
1. All statements and any accompanying exhibits for printing must be submitted on an IBM compatible 3.5-inch diskette in WordPerfect 5.1 format, typed in single space and may not exceed a total of 10 pages including attachments. Witnesses are advised that the Committee will rely on electronic submissions for printing the official hearing record.
2. Copies of whole documents submitted as exhibit material will not be accepted for printing. Instead, exhibit material should be referenced and quoted or paraphrased. All exhibit material not meeting these specifications will be maintained in the Committee files for review and use by the Committee.
3. A witness appearing at a public hearing, or submitting a statement for the record of a public hearing, or submitting written comments in response to a published request for comments by the Committee, must include on his statement or submission a list of all clients, persons, or organizations on whose behalf the witness appears.
4. A supplemental sheet must accompany each statement listing the name, company, address, telephone and fax numbers where the witness or the designated representative may be reached. This supplemental sheet will not be included in the printed record.
The above restrictions and limitations apply only to material being submitted for printing. Statements and exhibits or supplementary material submitted solely for distribution to the Members, the press, and the public during the course of a public hearing may be submitted in other forms.
The
Committee seeks to make its facilities accessible to persons with
disabilities. If you are in need of special accommodations, please
call 202-225-1721 or 202-226-3411 TTD/TTY in advance of the event
(four business days notice is requested). Questions with regard to
special accommodation needs in general (including availability of
Committee materials in alternative formats) may be directed to the
Committee as noted above.