On the night of December 21st, Congress approved a $900 billion stimulus package, the Consolidated Appropriations Act 2021. With eyes on COVID 19 relief efforts for businesses, the act renews several provisions, including the Work Opportunity Tax Credit (WOTC), Indian Employment Credit, and Federal Empowerment Zone. The bill also grants a $22M increase in federal funding to increase efficiencies with the WOTC program by using modern technology for the certification process.
The new bill extends WOTC through December 31, 2025:
The WOTC is a federal tax credit program that incentivizes employers to hire individuals who typically face barriers to employment. The tax credit can range from a maximum of $1,200 to $9,600 for each qualified new hire depending upon the new hire’s target category and there are currently 14 different target categories under which an employee may qualify.
Extends the Federal Empowerment Zone through December 31, 2025:
The Federal Empowerment Zone is a tax credit of up to $3,000 for employers who hire each full- or part-time employee who is an Empowerment Zone resident. The credit can be claimed if the business pays qualified zone wages to a qualified zone employee.
Extends Indian Employment Credit through December 31, 2021:
The Indian Employment Credit is a federal tax credit of up to $4,000 and was designed to encourage employers to hire and retain Native Americans who live on or near an Indian reservation.