Tax proposal would incentivize hiring aging-out foster youth

A pared-down version of a tax incentive to hire current or former foster youth is now part of a bigger youth employment bill introduced this month in Congress.

“Increasing youth employment opportunities can help address poverty and crime across communities in Illinois,” said Sen. Dick Durbin (Ill.), who co-authored the legislation with Sen. Tammy Duckworth and Rep. Robin Kelly. “As we recover from the pandemic, ensuring this generation of Americans has a fair shot at employment will increase the likelihood our youth will build safe and successful lives and improve the communities they call home.”

The Helping to Encourage Real Opportunities (HERO) for At-Risk Youth Act would amend the federal Work Opportunity Tax Credit (WOTC), which incentivizes the hiring of certain groups who struggle with barriers to employment, to include two groups of young job-searchers:

  • “youth ages 16-24 who are out of school and out of work.”
  • Any current or former foster youth age 16 up to 21 who was in care within 12 months of being hired.

An employer can gain a $2,400 tax credit through the WOTC, which is now a couple years overdue for reauthorization. 

A WOTC credit exclusively for current and former foster youth was first introduced in 2016, built out of the experience of the job training program run by the nonprofit iFoster, which has shown strong results in training foster youth for jobs with Starbucks, Raley’s grocery stores and other corporate partners.

“We pursued this path and the creation of this bill because when we talked to employers, they were not interested in the subsidized work internships or subsidized employment,” said Serita Cox, the co-founder and executive director of iFoster, in an interview with Youth Services Insider back in 2016. “Instead, they felt strongly about the tax credit offered to veterans.”

That bill, the Improved Employment Outcomes for Foster Youth Act, would have offered the tax credit to employers for hiring anyone between 18 and 27 who was in foster care on their 16th birthday.

The new bill has been introduced at a tumultuous time in the employment sector. The past two jobs reports have shown lower-than-expected increases – 266,000 new positions were added in April, about one-fourth of what was projected. This is occurring at a time when new jobs are not necessarily scarce; many employers have reported trouble finding workers to fill jobs as more and more of the retail economy opens back up.

From The Imprint Photo: Wikipedia


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