Insight on employment tax credits.
By Thomas Jones, Partner, Tax Services
Our nation’s unemployment rate hovers at nine percent and monthly job losses continue to rise. That has generated discussions in Washington about innovative fiscal policy instruments, such as job creation tax credits, to help stimulate labor demand. In 2010, Washington took action and signed the Hiring Incentive to Restore Employment (HIRE) Act into law, which provided two new tax benefits to employers. The first perk was a payroll tax exemption which Congress is trying to extend past its 2011 year-end expiration date. The second benefit of the HIRE Act was the New Hire Retention Credit, which provides general business tax credits for hiring and retaining qualified employees for a consecutive 52 weeks.
Such a credit has been tried only once before at the federal level, with the 1977-78 “New Jobs Tax Credit” that offered corporations with taxable income a credit proportional to the…
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