Businesses are being offered a tax credit if they hire workers who have been unemployed for at least 60 days and they can also claim the additional credit if they continue to employ these workers for at least a year. There are many people who believe that employers wish to hire yet there is either a lack of access to capital from small business loans or simply the cost of taking on new workers is preventing these companies from doing so.
However, this small business tax credit can be beneficial for businesses who hire these workers by offering them a payroll exemption on Social Security taxes that employers must pay and a credit of up to $1,000 per worker who is employed for over a year. These business tax credits are hoped to promote hesitant employers to hire more workers as the national unemployment rate and job market are still quite bleak.
The number of men and women in our nation who are suffering from unemployment continues to be a major problem in a variety of areas in the economy. Most notably, the housing market has suffered as a result of homeowners simply being unable to afford their home loan payments. While there have been programs instituted that can help these unemployed men and women avoid foreclosure or obtain a more affordable home loan payment, without the prospect of jobs there are many who feel that these mortgage assistance efforts may simply be delaying the inevitable.
Yet, a new small business jobs bill and this tax credit, called the Hiring Incentives to Restore Employment Act, are hoped to prod businesses who are on the fence about hiring to add to the workforce. While this tax credit is temporary, there is worry that businesses are simply not hiring due to the fact that they fear they cannot afford to do so or they cannot keep these employees for the long-term. However, many analysts believe that unless businesses start hiring and giving more Americans an income, then they are only creating the environment which is causing their business to suffer. This tax credit, among other things, is hoped to put more men and women back to work which would give them the money to pump back into the economy, and this will cause slow businesses to become profitable again.