Tax break for hiring youth expands—but workers may not see the gain
H.R. 2507 — Helping to Encourage Real Opportunities (HERO) for Youth Act of 2025 · Filed by Robin Kelly (D-IL) · 1 cosponsor · Introduced Mar 31, 2025 · Referred to committee
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What it does
This bill expands the Work Opportunity Tax Credit (WOTC)—a tax break for employers who hire certain disadvantaged workers—to cover year-round employment of high-school students working ≤20 hours/week during the school year, and adds a new category for 'disconnected youth' (ages 16–24 out of school and work for 6+ months, or ages 16–20 in recent foster care). Employers gain a larger tax credit; the stated intent is to incentivize hiring of underemployed young people.
Why we flagged it
The bill's operative mechanism is a tax expenditure—it expands an existing employer tax credit to cover new categories of young workers. The primary beneficiary is employers (private entities), not workers directly; the public benefit (job access) is indirect and contingent on employer behavior.
What the text implies
- No wage floor or employment-quality requirement: employers receive the credit regardless of wages paid or job quality, creating risk that the credit subsidizes low-wage work without improving worker outcomes.
- Disconnected youth definition relies on self-certification plus local agency verification, creating potential for inconsistent application and administrative burden on local workforce agencies.
The full analysis lists 4 implications of this text.
Who stands to gain
employers hiring youth and disconnected workers (private firms, nonprofits, public entities with tax; tax-credit intermediaries and staffing firms that may specialize in WOTC-eligible placements