On May 2, the House Ways and Means Committee approved, by voice vote, legislation (H.R. 4626) that would accelerate marriage tax penalty relief and would modify the Work Opportunity Tax Credit and the Welfare-to-Work Tax Credit.
Under current law, the standard deduction for a married couple filing a joint return will increase to twice the standard deduction for a single person filing a single return by 2009. This change is scheduled to be phased-in beginning in 2005. The Encouraging Work and Supporting Marriage Act (H.R. 4626) would accelerate the marriage tax penalty relief deduction to begin next year.
The Work Opportunity Tax Credit (WOTC) allows employers to take a tax credit of up to $2,400 for hiring individuals from certain targeted groups, including families who receive benefits under the Temporary Assistance for Needy Families (TANF) program. The Welfare-to-Work Tax Credit is available to employers who hire long-term family assistance recipients under TANF. H.R. 4626 would combine the WOTC and the Welfare-to-Work tax credits beginning in 2003. The combined credit would be available to employers hiring individuals from all of the categories under the targeted groups included in both the WOTC and the Welfare-to-Work Tax Credit.
