H.R. 6231 — Improve and Enhance the Work Opportunity Tax Credit Act

This section extends the Work Opportunity Tax Credit (WOTC)—which provides employers a tax credit for qualified first-year wages paid to individuals from targeted groups facing employment barriers (e.g., certain veterans, SNAP recipients, ex-felons, long-term TANF recipients)—through December 31, 2030 (from December 31, 2025) and enhances the credit for individuals who begin work after December 31, 2025, as follows: (1) revises the general credit to 50% of qualified first-year wages up to $6,000, plus (for employees with at least 400 hours of service) 50% of such wages from $6,001 to $12,000 (from 40% up to $6,000 for 400+ hours and 25% up to $6,000 for fewer hours); (2) provides for annual cost-of-living adjustments after 2025 to the $6,000 wage threshold in the general credit and the $10,000 thresholds for long-term family assistance recipients (rounded to the nearest $100, using 2024 as the base year); (3) increases the wage limitation for certain veterans to 200%, 250%, or 400% of the adjusted $6,000 amount (depending on veteran status); (4) limits the credit for summer youth employees to 40% of qualified first-year wages up to 50% of the adjusted $6,000 amount (with 25% for certain high-risk youth and none for others); (5) sets the credit for long-term family assistance recipients at 40% of first-year wages up to $10,000 plus 50% of second-year wages up to $10,000; (6) ties agricultural/railway labor and minimum-employment-period wage caps to the adjusted $6,000 amount (with monthly limits at 1/12 thereof); and (7) increases the credit percentage for individuals not meeting the 400-hour threshold from 40% to 50% of wages up to the adjusted $6,000 amount.

This section removes the upper age limit of 40 for qualified Supplemental Nutrition Assistance Program (SNAP) benefits recipients to be eligible under the Work Opportunity Tax Credit (WOTC) (previously, eligible SNAP recipients had to be at least 18 but under age 40). The WOTC provides employers a tax credit of up to $2,400 (or $9,600 for certain long-term recipients) for hiring individuals from targeted groups, including certain SNAP recipients certified as receiving benefits in the 18-month period ending on the hiring date. The change applies to individuals who begin work for the employer after December 31, 2025.

This section expands eligibility for the Work Opportunity Tax Credit (WOTC)—which provides employers a tax credit of up to $9,600 (40% of first-year wages up to $24,000, generally) for hiring individuals from targeted groups facing employment barriers (e.g., veterans, long-term unemployed)—to include qualified military spouses (i.e., spouses of Armed Forces members, as certified by a designated local agency). The change applies to wages paid after the date of enactment for individuals who begin work for the employer after such date.

This section directs the Secretaries of the Treasury, Commerce, and Labor, and the Small Business Administration Administrator (or their delegates), in consultation and consistent with applicable law, to promote hiring of targeted group members (as defined in IRC §51(d) for the Work Opportunity Tax Credit, i.e., certain disadvantaged individuals such as qualified ex-felons, vocational rehabilitation referrals, long-term family assistance recipients, and designated community residents) by business leaders in critical industry sectors including manufacturing, infrastructure, energy, health care, and construction.