Memo of Support: S.8463-A (Kaplan) / A.9171 (Joyner) – Establish a state level Work Opportunity Tax Credit
Date: March 25, 2022
Bill: S.8463-A (Kaplan) / A.9171 (Joyner)
Issue: Establish a state level Work Opportunity Tax Credit
MEMO OF SUPPORT
S.8463-A (Kaplan) / A.9171 (Joyner) – Establish a state level Work Opportunity Tax Credit
MACNY – The Manufacturers Association of Central New York supports S.8463-A (Kaplan)/ A.9171 (Joyner) that would establish a Work Opportunity Tax Credit under New York’s personal income, corporate franchise tax and insurance tax. The credit would be for employers in New York that hire individuals from a targeted group.
MACNY is a not-for-profit association representing more than 300 businesses and organizations across 26 counties in Central and Upstate New York. About three-quarters of MACNY’s members are industrial companies that supply the region, state, and globe with a variety of products and services and employ thousands of individuals. MACNY operates several programs geared toward filling the talent pipeline in the Central New York region and statewide.
The most consistent challenge facing manufacturers is finding high-quality and high-retention employees for entry-level manufacturing positions and beyond. In Central New York alone there are hundreds of job openings for these positions, constraining company growth. Solving the current worker shortage problem is critical for New York’s economy. Therefore, this targeted hiring incentive would serve as a great tool to assist manufacturers and other employers that are looking for additional strategies to attract workers, while helping underserved populations gain great career opportunities.
The Work Opportunity Tax Credit (WOTC) is a federal tax credit available to employers for hiring individuals from certain targeted groups that have consistently faced significant barriers to employment. Data shows that New York underutilizes the federal Worker Opportunity Tax Credit incentive program. The WOTC is available for wages paid to certain individuals who begin work on or before December 31, 2025. The WOTC may be claimed by any employer that hires and pays or incurs wages to certain individuals certified by a designated local agency as being a member of one of 10 targeted groups to include: Qualified IV-A Recipient; Veteran, Formerly Incarcerated, Designated Community Resident, Vocational Rehabilitation Referral, Summer Youth Employee, SNAP recipient, SSI Recipient, Long Term Family Assistance Recipient, and Qualified Long-Term Unemployment.
The credit is equal to 25 percent of wages paid to qualified individuals who perform at least 120 but less than 400 hours of service for the employer, and 40 percent for employees with 400 or more hours, applicable to the first $6,000 of wages paid, for a maximum credit of $2,400. For qualified disabled veterans, the credit applies to the first $24,000 in wages, for a maximum credit of $9,000.
For the above listed reasons, MACNY is supportive of S.8463-A (Kaplan) / A.9171 (Joyner) regarding the Work Opportunity Tax Credit.