S. 492 — Improve and Enhance the Work Opportunity Tax Credit Act

This section modifies the work opportunity tax credit (WOTC)—which provides employers a tax credit based on qualified wages paid to individuals from targeted groups (e.g., veterans, long-term family assistance recipients, summer youth employees)—as follows: (1) increases the credit to 50% of qualified first-year wages up to $6,000 plus 50% of such wages from $6,001 to $12,000 for individuals performing at least 400 hours of service (from 40% of up to $6,000); (2) increases the referenced $6,000 and $12,000 amounts to $12,000 and $24,000, respectively, for qualified veterans under IRC §51(d)(3)(A)(ii)(I), to $14,000 and $28,000 for those under §51(d)(3)(A)(iv), and to $24,000 and $48,000 for those under §51(d)(3)(A)(ii)(II); (3) increases to 50% (from 40%) the credit available for individuals not meeting minimum employment periods; (4) limits the credit for summer youth employees to 40% of up to $3,000 in qualified first-year wages, with 25% for those not meeting minimum employment periods under §51(i)(3)(A) and zero for those under §51(i)(3)(B); and (5) for long-term family assistance recipients, provides 40% of qualified first-year wages up to $10,000 and 50% of qualified second-year wages up to $10,000. The changes apply to individuals who begin work for the employer after December 31, 2024.

This section removes the upper age limit of 40 for qualified Supplemental Nutrition Assistance Program (SNAP) recipients to be eligible for the Work Opportunity Tax Credit (WOTC) (i.e., a tax credit of up to $2,400 for the first year of wages paid to employees from targeted groups facing barriers to employment). The change applies to individuals who begin work for the employer after December 31, 2024.