Small business owners have been able to use a tax credit for hiring new employees as the HIRE Act, which was set in place in March, provides tax benefits to employers that provide job opportunities for previously unemployed workers. There many who believe that tax credits are one way in which small businesses will be prompted to hire more workers seeing as how companies that are currently hesitant to hire, may be able to afford new employees and benefit from these tax credits and exemptions.
The first tax credit, according to the IRS website, is an exemption which allows employers to forgo paying their share of Social Security taxes on wages that are paid to these qualified employees, who were previously unemployed before being hired. Also, if one of these unemployed workers is retained for at least one year businesses will be able to take advantage of a general tax credit which may be worth up to $1000 per worker.
There are many who believe that these types of credits are what is needed in order to get America working again as unemployment continues to plague many across the nation. While some small businesses have asked that small business loans be made available, there are companies who may be willing to hire but are hesitant to do so at the present time and certainly will not hire workers if they take on debt from a small business loan.
There have been proposals to extend these tax credits, however Congress has failed to pass these measures as of yet. While disagreements is still abound over issues like unemployment benefits extensions, there seems to be general support for offering small businesses incentives or tax exemptions when they hire new workers. Since many companies are not making as much due to a slow economy, it is believe that if these companies can cut costs or at least save money, they will be more willing to hire new employees which is something that is desperately needed to lower our current unemployment rate.