S. 492: Improve and Enhance the Work Opportunity Tax Credit Act
Sponsor
Bill Cassidy
Republican · LA
Keeping hard-to-hire workers on the payroll should pay more
Why it matters
$2,400 is the most an employer can usually claim today for hiring someone the Work Opportunity Tax Credit targets. S. 492 raises that to $6,000 when the worker stays at least 400 hours, lifts the ceiling to $24,000 for some disabled veterans, and opens the credit to SNAP recipients 40 and older.
The Work Opportunity Tax Credit already exists. Employers who hire people from certain groups, including veterans, SNAP and cash-assistance recipients, people with past felony convictions and the long-term unemployed, can take a share of that worker's first-year wages off their federal taxes. For most of those hires, the cap today is 40% of the first $6,000 in wages, or $2,400.
S. 492 adds a second tier. The employer claims 50% of the first $6,000, then another 50% of wages between $6,000 and $12,000, but only if the worker has put in at least 400 hours. A covered hire who stays past 400 hours would be worth up to $6,000 to the employer, up from $2,400.
Shorter stints don't get the bigger number. A worker who leaves between 120 and 399 hours still earns the employer $1,500, same as today, and under 120 hours earns nothing.
Veterans get the same two-tier structure on higher wage caps. The maximum credit would rise to $12,000 for a veteran with a service-connected disability hired within a year of discharge, $14,000 for a veteran unemployed six months or more, and $24,000 for a disabled veteran unemployed that long. Today those caps are $4,800, $5,600 and $9,600.
The bill also ends the rule that drops SNAP recipients from the credit once they turn 40. Summer youth hires and long-term family assistance recipients keep roughly the rules they have now.
No money goes to the worker. The whole design is to change the employer's arithmetic, especially the choice between keeping a new hire through the rough early months or letting them go.
Bill Progress
Latest Action · Feb 10, 2025
Read twice and Referred to Finance. for review
S. 492 Bill Summary
What S. 492 actually does.
A covered hire can be worth $6,000, not $2,400
Employers claim 50% of the first $6,000 in first-year wages, plus 50% of wages from $6,000 to $12,000 for workers with at least 400 hours. Current law allows 40% of the first $6,000.
The larger credit only pays for workers who stay
The second tier unlocks at 400 hours. Workers with 120 to 399 hours still earn the employer 25% of the first $6,000, or $1,500. Under 120 hours, no credit.
Veteran hires can reach $12,000 to $24,000
Wage caps double to $24,000, $28,000 or $48,000 depending on the veteran's category, putting the maximum credit at $12,000, $14,000 or $24,000.
SNAP recipients 40 and older become eligible
Current law covers SNAP recipients aged 18 to 39. The bill drops the upper age limit.
Summer youth and family assistance rules stay put
Summer youth hires remain at 40% of up to $3,000 in wages. Long-term family assistance recipients remain at 40% of up to $10,000 in year one and 50% of up to $10,000 in year two.
Applies to hires starting in 2025
Both changes cover workers who begin work after December 31, 2024.
Who benefits from S. 492?
Veterans looking for work after service
An employer weighing a disabled veteran who has been out of work six months could claim up to $24,000 against taxes, compared with $9,600 today.
SNAP recipients in their 40s, 50s and 60s
Older workers on food assistance who currently fall outside the credit would count as a covered hire for the first time.
People re-entering the workforce
Anyone already in a covered group, from people with past convictions to the long-term unemployed, becomes up to $3,600 more valuable to an employer who keeps them past 400 hours.
Employers with high early turnover
Retailers, restaurants, warehouses and staffing firms that hire in volume would get a larger return for holding on to covered workers beyond the first few months.
Who is affected by S. 492?
Employers claiming the credit
To get the full amount, businesses have to certify eligibility for each hire and track hours against the 120- and 400-hour thresholds.
Job seekers outside the covered groups
Applicants who don't fall into a covered group see no change, while the covered applicants they compete with become cheaper to hire.
Short-tenure covered workers
Workers who leave or are let go before 400 hours bring the employer the same credit as today, so the bigger incentive doesn't reach them.
Federal taxpayers
A larger credit means less tax revenue. No Congressional Budget Office estimate for the bill is available in the materials reviewed here.
S492 Legislative Journey
Committee Action
Feb 10, 2025
Read twice and referred to the Committee on Finance.
About the Sponsor
Bill Cassidy
Republican, LA · 17 years in Congress
Committees: Health, Education, Labor, and Pensions, Veterans' Affairs, Finance
View full profile →
Cosponsors (3)
All 3 cosponsors are Democrats. Cosponsors represent 3 states: Delaware, New Hampshire, New Mexico.
Committee Sponsors
Finance Committee
2 of 27 committee members cosponsored
14 Republicans across this committee haven't cosponsored yet. Mobilize their constituents
What laws does S. 492 change?
1 changes
Sections Amended
Section 51(e) of such Code
striking ``Credit for Second-year Wages'' and inserting ``Special Rules for Determining Credit''
S. 492 Quick Facts
- Committee
- Finance
- Chamber
- Senate
- Policy
- Taxation
- Introduced
- Feb 10, 2025
Read twice and Referred to Finance. for review
Feb 10, 2025
Official Sources
Official bill text, sponsors, cosponsors and legislative actions for the Improve and Enhance the Work Opportunity Tax Credit Act.
The IRS explains how the credit works today, including the 40% rate on up to $6,000 in wages that S. 492 would raise.
The Labor Department runs the certification process employers use to confirm a new hire belongs to a targeted group.
The section of the tax code that S. 492 amends to add the 50% two-tier credit and drop the SNAP age limit.
The form employers file to claim the credit for wages paid to targeted group employees.
The committee S. 492 was referred to, and where any tax package carrying it would originate in the Senate.
S. 492 Common Questions
How much is the Work Opportunity Tax Credit under S. 492?
Up to $6,000 per covered hire, versus $2,400 today. The employer claims 50% of the first $6,000 in first-year wages, plus 50% of the next $6,000 once the worker reaches 400 hours.
What if the new hire leaves before 400 hours?
The employer gets the same as today. Between 120 and 399 hours, the credit is 25% of the first $6,000, or $1,500. Under 120 hours, there's no credit at all.
How much could an employer get for hiring a veteran?
Up to $12,000 for a veteran with a service-connected disability hired within a year of discharge, $14,000 for a veteran unemployed six months or more, and $24,000 for a disabled veteran unemployed that long. Today's maximums are $4,800, $5,600 and $9,600.
I'm over 40 and on SNAP. Would S. 492 cover me?
Yes, if the bill passes. Right now the credit only covers SNAP recipients aged 18 to 39. S. 492 removes the upper age limit, so an employer could claim the credit for hiring you at any age.
Who counts as a targeted worker for this credit?
Current law covers groups including qualifying veterans, SNAP and cash-assistance recipients, people with felony convictions, SSI recipients, vocational rehabilitation referrals, the long-term unemployed and some summer youth hires. S. 492 keeps that list and widens the SNAP group.
Does the worker get any of this money?
No. The credit reduces the employer's federal taxes. Your paycheck doesn't change, but you may be more likely to be hired and kept on.
Does S. 492 change credits for summer youth or family assistance hires?
Not in any meaningful way. Summer youth hires stay at 40% of up to $3,000 in wages. Long-term family assistance recipients stay at 40% of up to $10,000 in year one and 50% of up to $10,000 in year two.
When would S. 492 take effect?
The changes would apply to workers who start a job after December 31, 2024, so hires from 2025 onward would count even though the bill hasn't passed yet.
Based on S. 492 bill text
S. 492 Bill Text
“To amend the Internal Revenue Code of 1986 to improve and enhance the work opportunity tax credit, to encourage longer-service employment, and to modernize the credit to make it more effective as a hiring incentive for targeted workers, and for other purposes.”
Source: U.S. Government Publishing Office
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