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National Restaurant Association - Here’s why restaurants should support the Work Opportunity Tax Credit

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Here’s why restaurants should support the Work Opportunity Tax Credit

Time is running out for Congress to renew the Work Opportunity Tax Credit (WOTC), a program that allows restaurants and other employers to help thousands of disadvantaged individuals enter and re-enter the workforce.

The background: Since its inception in 1996, the Work Opportunity Tax Credit has helped restaurants and other employers hire more than 6 million people from demographic groups that are historically difficult to employ, like disabled veterans, individuals receiving certain types of public assistance, and employees referred from vocational rehabilitation programs.

How restaurants benefit: The tax savings for restaurateurs and other employers who hire and retain employees under the WOTC can be significant. The IRS offers a breakdown of the potential savings on its website. Depending on the employee’s situation, the tax credit for hiring can range from $2,400 to $5,600. Additional credits are available for retaining employees.

The challenge: While the WOTC was established as a temporary program, Congress has routinely extended it upon expiration. However, the House and Senate have yet to act since the WOTC expired on Dec. 31, 2013, along with more than 50 other tax provisions. That could soon change if the House passes bipartisan legislation introduced last week by Reps. Aaron Schock (R-Ill.) and Charles Rangel (D-N.Y.) that would both renew the WOTC and make it permanent. The National Restaurant Association supports a permanent extension of the WOTC.

“As the nation’s second largest private sector employer and an industry of small business and large companies, the restaurant industry is creating jobs for millions of Americans, whether it's their first job or life-long career, in communities across the country,” said Scott DeFife, NRA executive vice president, policy and government affairs. “This legislation will help restaurateurs nationwide continue to provide opportunity and pathways to success for individuals of all backgrounds and skill levels looking to enter the foodservice industry.”

Read the NRA’s full statement on legislation to renew the Work Opportunity Tax Credit.

The NRA is aggressively engaging House members to urge them to pass H.R. 5264 and is seeking sponsors for a Senate bill to renew and permanently extend the WOTC.

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