Last March, President Obama signed the jobs bill into law. The Hiring Incentives to Restore Employment (HIRE) Act was designed to boost hiring by offering employers exemption from Social Security payroll tax on wages paid to qualified employees that work from March 19, 2010, through Dec. 31, 2010.
There were various elements that businesses needed to confirm before qualifying for the credits. Across the country, thousands of businesses did qualify, resulting in significant savings.
The HIRE Act expired on Dec. 31.
Fortunately, there are other tax credits that employers should seriously consider. The government has put into place various programs that give employers motivation with creative hiring.
The Work Opportunity Tax Credit offsets the corporations’ tax liability by incentivizing business to hire from diverse groups.
When businesses look at candidates who have been on government assistance, welfare or food stamps, on disability or rehabilitation, and other disadvantaged groups, they can help the community by hiring these people. They can also qualify for tax credits that help improve their businesses. The objective is simple — enable employees to move from economic dependency into self-sufficiency, and incentivize workplace diversity for employers through tax credits.
Another employment incentive exists in Connecticut, by way of a program called Enterprise Zones. Connecticut was the first state in the country to establish Enterprise Zones, which are sectors targeted for economic revitalization. Enterprise Zones were developed to encourage growth and investment in distressed areas. By utilizing these geographic areas, the government provides incentives to companies that increase employment, build or renovate facilities, or build business in various ways within the zone boundaries.
The boundaries for these Enterprise Zones, designated by Housing and Urban Development change frequently, but they are a great way for businesses to generate tax incentives, and again, do something positive for the region. There are many different ways that businesses can benefit, sales and use tax credit, corporate income tax credit, even property tax exemption.
In addition, Connecticut also offers numerous other tax credits to companies, including investment credits, research credits, job creation credits, environmental credits and land conservation credits.
Because the economy is a priority on literally every level of government — locally, regionally, statewide and nationally — businesses have much to consider in order to help the recovery. The government is implementing programs to help stimulate growth, encourage new hires and make a concerted effort to get people back to work. Unfortunately, the message is not always heard loud and clear. While the HIRE Act did have participation, many companies did not know or understand how to implement it. Now it is imperative that companies, business leaders, and entrepreneurs take look at programs like Work Opportunity Tax Credit and Enterprise Zones, and any successors to the HIRE Act to see what can benefit them the most.
They need to understand who and what qualifies for the tax credits, take a look at their own books to determine what tax options are most helpful. They must fill out paperwork and file in a timely matter to qualify. Sadly, just one day late can mean complete disqualification from an important program.
Human Resource professionals have their hands full with screening employees and understanding the fine print of eligibility. Experts like a professional employer organization, account or payroll company can provide good counsel, calculating and reporting the tax credits and positions that qualify for specific advantages.
With 2011 already here, and the jury out as to how much the economy is recovering, employment is still a critical issue in America, and equally so here in Hartford. By looking carefully at the Work Opportunity Tax Credit and Enterprise Zones, businesses can flourish and the economy can continue its stride to improvement.
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Stephanie Fischer is business solutions liaison at Oasis Outsourcing, a professional employer organization with an office in Hartford. Reach her through the company’s website at www.oasisadvantage.com.
