S.B. 167, An Act Establishing a Tax Credit for Businesses that Hire Formerly Incarcerated People

Currently, the federal government provides a tax credit for people who hire certain vulnerable people, including people with felony convictions. The Connecticut Department of Labor staffs people who process applications and verify that employees qualify for this tax credit, called the Work Opportunity Tax Credit or WOTC. The program is well-used in Connecticut, growing from 24,704 applications in 2014 to
37,279 in 2016. But, unfortunately, it has not been very effective for getting people with criminal records hired. Nationwide, only around 3% of employees who earned a WOTC for their employer were people with felony convictions. This could be because the WOTC only grants a tax credit for companies that hire a person within their first year of release, which limits eligibility. Moreover, the WOTC, in Connecticut and
nationwide, has been plagued by backlogs. This law, then, could help fill the gaps left by the WOTC. The bill grants its proposed tax credit to people who have been released within the past two years, rather than the one-year requirement in the federal law. Local administration would eliminate the problem with federal backlog.

Establishing a Connecticut tax credit is one tool in the chest when it comes to helping people with a criminal history get employment. We believe in using this tool and others that will bring about an end to the employment barriers and discrimination faced by people with a criminal record. The ACLU-CT supports Senate Bill 167, An Act Establishing a Tax Credit for Businesses that Hire Formerly Incarcerated People, and urges the legislature to support this bill as well.