New Federal Tax Incentives Could Help Ease County Unemployment
Cumberland County officials want local businesses to know about a pair of new federal tax incentives aimed at easing unemployment. Both are part of the Hiring Incentives to Restore Employment (HIRE) act signed into law by President Obama in March.
Businesses that hire unemployed workers through the end of the year could qualify for a 6.2 percent payroll tax incentive, which essentially exempts them from their share of Social Security taxes on wages.
Also, for every employee that a business retains for at least a year, the business can claim an additional general business tax credit, up to $1,000 per employee on its 2011 income tax returns.
“This is a great incentive for Cumberland County businesses and nonprofits to begin rebuilding their workforces again,” says Freeholder Nelson Thompson, Liaison to the Office of Employment and Training. “These are the kinds of programs we need right now.”
Businesses, agricultural employers, tax-exempt organizations and public colleges and universities all qualify to claim the payroll tax benefit for eligible newly hired employees. Household employers cannot claim this new tax benefit.
Employers claim the payroll tax benefit on the federal employment tax return they file, usually quarterly, with the IRS. Eligible employers will be able to claim the new tax incentive on their revised employment tax form for the second quarter of 2010.
“County businesses and nonprofits should keep these benefits in mind as they plan their coming year, says Freeholder Director, Louis Magazzu.
The two tax benefits are especially helpful to employers who are adding positions to their payrolls. New hires filling existing positions also qualify but only if the workers they are replacing left voluntarily or for cause. Family members and other relatives do not qualify.
"The Hire Act will add a spark for hiring in Cumberland County and will reinforce private sector growth, says Christy DiLeonardo, Division Director of Cumberland County’s Business Services & Workforce Investment Board. “Employers have a new opportunity to save tax dollars as they hire new staff from among the unemployed."
For more detailed information on the Hire Act, businesses can visit www.irs.gov.