Posted by jtessler on March 7th, 2012

WOTC Coalition Reaches Out To The White House

The following letter is from Paul Suplizio, President of the WOTC Coalition. It was addressed to Mr. Kareem A. Dale, Special Assistant to the President, on Thursday March 1, 2012.


March 1, 2012

The Honorable Kareem A. Dale
Special Assistant to the President
The White House
Washington, DC

Dear Mr. Dale:

Congress has allowed several tax incentives important to the economy to expire, including the research and development tax credit, work opportunity tax credit for all but veterans, Indian employment tax credit, employer child care tax credit, new markets tax credit, empowerment zones tax incentives, and several others.

All these are related importantly to jobs, and their $40 billion in tax expenditure would boost the economy. WOTC is especially needed to continue equal opportunity in the labor market—otherwise chronically unemployed workers will continue to experience low job prospects even as the economy recovers.

This applies with extra force to people with disabilities, large numbers of whom have withdrawn from the labor force over the span of the recession due to discouragement.

Please bring this matter to the attention of Mr. Sperling and the National Economic Council’s policy staff urgently. The House shows no signs of moving, but Senate Democrats led by Majority Leader Harry Reid and Finance Committee Chairman Max Baucus have made renewal of the tax extenders a high priority. For a long time the so-called “tax extenders” have enjoyed bi-partisan support, so it’s possible they might prevail on a cloture vote.

Nevertheless, no bill has been introduced nor vote scheduled in the Senate thus far. The NEC should signal to Senator Reid the Administration’s hope that a bill of “tax relief for families, farmers, ranchers, and businesses” (as the extenders have been described in the past) will be brought to the Senate soon.

To allow these incentives to remain expired till the end of the year, or until tax reform comes up, would be disruptive and add to economic uncertainty; in the case of WOTC, it would undermine the Administration’s commitment to equal opportunity for all workers in the labor market.

A complete list of these eighty or so “tax extenders” is given at the web site of the Joint Committee on Taxation, See JCX-1-12.

Thank you for the opportunity to bring this matter to your attention. Should you have any questions, please feel free to contact me at 703-587-4566.



President, WOTC Coalition

Posted by jtessler on December 26th, 2011

Don’t Overlook the Jobs Bill’s Tax Incentives

Few small businesses are taking advantage of the HIRE Act’s 2010 payroll exemption and 2011 credit, says tax-credit consultant Brandon Edwards, CEO of Tax Credit Co.

By: Karen E. Klein

The $18 billion jobs bill signed by President Barack Obama on Mar. 18 represents “the democratization of tax credits,” says Brandon Edwards, president of Los Angeles-based consulting firm The Tax Credit Company. Despite the legislation’s simplicity and availability to every U.S. business, Edwards estimates that 90 percent of small companies are unaware of the Hiring Incentives to Restore Employment (HIRE) Act, outlined at this page on the IRS Web site. Edwards says that companies can save as much as $7,621 per qualified employee under HIRE. He spoke recently to Smart Answers columnist Karen E. Klein. Edited excerpts of their conversation follow.

Karen E. Klein: The HIRE Act is part of a jobs bill passed in March. What’s different about it?

Brandon Edwards: In a lot of ways it’s unprecedented, particularly for small businesses. Many tax credits are so complicated and specific that smaller companies don’t qualify or don’t have the ability to pursue them. This bill spurs hiring by American businesses and every company in the country is eligible for it. Even small businesses can reasonably expect to collect benefits from it.

What are the benefits and how does a small business get them?

There are two incentives. The first is a payroll tax exemption that applies immediately and lasts through Dec. 31, 2010. The second is a $1,000 federal, dollar-for-dollar tax credit that will be available in the 2011 tax year. The way to qualify is to hire someone who has worked less than 41 hours in the prior 60 days and keep them on your payroll for at least 52 weeks.

Let’s go through the hiring piece first. How does an employer determine if a new employee qualifies for the HIRE program?

A lot of people are out of work, so a lot of people are going to qualify. In this job market, hiring someone who’s been out of work for two months doesn’t mean you’re hiring a less-qualified employee. The projected qualification rate is 15 percent to 30 percent, but we’re seeing about 40 percent to 60 percent of new hires qualifying in certain areas of the country. It’s pretty easy to understand, although there are some gray areas. For instance, new employees don’t have to have been collecting unemployment before they’re hired. So a new graduate coming out of college is likely to qualify.

The key is that new employees have to have been out of work, or have worked less than one full-time week for 60 days, before they start employment with you. It’s important to keep in mind that the 60-day period is measured from the employment start date, not from the date when you first contact someone or interview them for a job.

Is there any concern from employers about asking whether a job candidate has been out of work?

It’s something that people are nervous about, but they shouldn’t worry. It’s very simple and part of a standard interview to ask for recent work history. And this is a program where the federal government is specifically encouraging business to hire people to meet the criteria.

What kind of paperwork is involved and are payroll providers handling it?

There’s an affidavit, called a W-11 form, that the employee has to sign to attest to the fact that they qualify and the employer must retain that in their records. There’s no requirement for certification or for the form to be filed with the IRS.

Payroll companies have had to make sure that they can accommodate this program. But small employers who hire a qualified employee should double check to make sure their payroll company is not paying full payroll tax for that person. When quarterly payroll taxes are filed, there’s an adjustment you make to show that you have an exempt employee.


For The Rest Of The Article CLICK HERE


Posted by admin on January 27th, 2011

Rep. Bruce Braley Reintroduces HIRE Act Payroll Exemption Extension


Washington, DC – Today, Congressman Bruce Braley (IA-01) introduced a bill to cut payroll taxes for businesses that hire unemployed workers. The Back to Work Extension Act extends a provision of the HIRE Act that provides employers a payroll tax break if they hire workers who were previously unemployed.

“Creating jobs is my top priority and this program is already proven to put Iowans back to work,” said Braley. “Between February and December of 2010, Iowa businesses hired more than 104,000 workers who are eligible for this tax cut. This tax credit works – and we must extend it now to give employers incentives to create jobs and hire unemployed workers.”

The Back to Work Extension Act will exempt small businesses from paying the employer’s share of the Social Security tax for up to one year through December 31, 2011 – if they hire workers who have been unemployed for more than 60 days prior to employment. Employers who keep eligible employees on the payroll for 52 consecutive weeks will receive an additional $1,000 tax credit. The previous exemption expired on December 31, 2010.

Rep. Braley introduced a similar bill in the 111th Congress, H.R. 6152. Text of the new bill is not yet available.

Posted by admin on September 22nd, 2010

President Discusses Payroll Tax Holiday

The following is from a transcript of a CNBC town hall meeting in which President Obama was interviewed by John Harwood:

September 20, 2010 Monday


PRESIDENT OBAMA: I do want to be fair about your other point, which is the costs of workers. One of the things — one of the laws that we passed this year was the HIRE Act, which said we’ll give you a tax break if you hire a new worker, so to try to reduce some of those costs. And in some high-cost places, like New York City, the cost for the average worker may be even higher than it is if you are in — in some other places.

MR. HARWOOD: Why not a payroll tax holiday for exactly the issue that he mentioned?

PRESIDENT OBAMA: Yeah. Well, this is something that we’ve examined. And you know, we are going to be working with businesses to see does it make sense for us to initiate some additional incentives in order to hire.

The one thing that I want to make clear about, though, is — is our health-care bill didn’t substantially add to employers’ health- care costs. It exempts from any kind of costs for employers folks who have 50 employees or less.

What we’ve said is, if you’ve got more than 50 employees, then you should be able to give them health care. And we will give you tax incentives; basically, we’ll pay for a — we’ll give you a break that’s as much (as ?) a third of your costs for their health-care premiums.

And the reason we’re doing that is because if you’re not paying for it, then the taxpayers are paying for it. We’re all paying for it because, on average, these emergency room visits for people who don’t have health insurance add up to an extra thousand dollars on each of our premiums who do have health insurance.

MR. HARWOOD: Did I understand you just to say a moment ago that you are continuing to examine a payroll tax holiday and may be open to that as a way of spurring hiring?

PRESIDENT OBAMA: I — John, I think here’s what you can rest assured, is we are willing to look at any idea that’s out there that we think will help. But we’ve got to do so in a responsible way. We’ve got to make sure that whatever it is that we’re proposing gives us the best bang for the buck. A lot of ideas that look good on paper, when you start digging into them it turns out that they’re more complicated and — and they may end up not working the way they’re supposed to.

And we’ve got to be self-critical. There are times where, for example, on the — in the housing market, we were very successful in keeping the housing market alive at a time when it had completely shut down. But a lot of folks are still losing their homes because they’ve lost their jobs. They’re just having trouble making their mortgage payments. And what we’ve been trying to do is to get the banks to work with the borrower to see: Can you adjust the mortgage so that if they’re willing to make a payment, that they can stay in their homes?

Posted by admin on September 22nd, 2010

Rep. Braley Introduces HIRE Act Tax Cut Extension

The following press release was issued by Congressman Bruce Braley (D-Iowa):

Washington, DC – Rep. Bruce Braley (D-Iowa) announced today he has introduced legislation to extend a provision of the HIRE Act that provides employers a payroll tax break if they hire previously-unemployed workers. The tax cut, based on Braley’s Back to Work Act, exempts employers from paying their share of payroll taxes if they hire an employee who has been unemployed for more than 60 days prior to hiring. According to the US Treasury Department, more than 53,733 Iowa workers hired between February and June 2010 are eligible for the Braley tax cut.

“As we continue to strengthen our economy, we need to invest in programs that are proven to create jobs,” Braley said. “Between February and June of this year, Iowa businesses hired more than 53,000 workers who are eligible for this tax cut. We need to continue giving employers incentives to create jobs and hire unemployed workers, and this tax cut does exactly that.” The Back to Work Extension Act will exempt small businesses from paying the employer’s share of the social security tax for up to one year through December 31, 2011, if they hire workers who have been unemployed for more than 60 days prior to employment. Employers who keep eligible employees on the payroll for 52 consecutive weeks will receive an additional $1,000 tax credit. The previous Back to Work Act exempted employers from paying payroll taxes through December 31, 2010. If enacted before December 31, 2010, the Back to Work Extension Act will provide employers a 12-month exemption for hiring previously unemployed workers. Employees hired after January 1, 2011, will be eligible through December 31, 2011.

Posted by admin on September 14th, 2010

An Incentive to Hire

Our Company President, Brandon Edwards, is quoted in a recent article (registration required) in Staffing Management magazine wherein he clears up some confusion surrounding capture of the HIRE Act tax credit, as well as giving insight into the value that can be realized by screening job applicants at the point of hire:

“Larger employers are screening everybody to find out whether the credit is applicable,” he says.

However, fewer than 10 percent of small employers are taking advantage of the act so far, according to Edwards. “Either they don’t know about it or haven’t set up a screening process or don’t have a dedicated person on staff to work on it,” he says.

Further, concerning qualification rates, Mr. Edwards says:

Data from The Tax Credit Co. show that the number of new hires considered eligible may be higher than initially thought. “Originally, one projection forecast that 15 percent to 30 percent of new hires would qualify, but now we’re seeing that over 50 percent of job seekers are qualified,” Edwards says.

The full text of the article is below. A downloadable, embedded version of the document is also available.

Posted by admin on September 11th, 2010

“Measure Succeeds in Promoting Private-Sector Hiring” – Treasury Department

Treasury Department Assistant Secretary for Economic Policy Alan Krueger has released an Op-Ed piece where he writes about the positive impact of the HIRE Act on the nation’s economic recovery, specifically concerning private-sector hiring. Says Mr. Krueger:

Analysis suggests that the HIRE Act is working. According to recent data, employers hired some 6.9 million unemployed workers who are eligible for HIRE Act tax relief through July. Moreover, preliminary evidence suggests that employers have already claimed tax credits for about one in every four eligible workers hired. This reduces the payroll tax payments employers send to the federal government, leaving them with more money to expand their businesses.

Also, The Treasury Department published an updated report quantifying the number of newly hired workers who qualify under the HIRE Act – that number stands at 6.9 million currently

The full text of Mr. Krueger’s Op-Ed and the The Treasury Department HIRE act report are available after the jump.

Posted by admin on August 12th, 2010

New HIRE Act Extension Bill Introduced in House

Representative Paul Tonko (D-NY) has introduced H.R. 6105 to extend the benefits of the HIRE Act through 6/30/2011. The language of the House bill is essentially the same as Senator Schumer’s S. 3623.

Posted by admin on August 6th, 2010

Americans Want to Work Act Details

Here are additional details on Senator Stabenow’s “Americans Want to Work Act” HIRE Act modifications:

HIRE Act Background: The HIRE Act, signed into law earlier this year, provides two new tax incentives for employers to hire unemployed workers. Under the HIRE Act, businesses that hire Americans who have been out of work for at least 60 days are exempt from paying their 6.2 percent share of Social Security payroll taxes for all new hires up to the FICA wage cap of $106,800. To promote long-term employment, the HIRE Act also provides an additional $1,000 general business tax credit for each worker retained for at least one year.

Americans Want to Work Act Provisions: The bill includes two key provisions that apply to all states:

Extends the successful HIRE Act Payroll Tax Exemption for one year, through the end of 2011.

Doubles the general business tax credit, from $1,000 to $2,000, for businesses that hire (and retain for 52 weeks) someone who has exhausted all unemployment benefits. This is applicable to anyone who has exhausted all unemployment benefits or that is eligible for Tier 5. This would be effective at the date of enactment.

Posted by admin on August 5th, 2010

HIRE Act Extension Legislation

There is now a serious effort underway to extend the payroll tax exemption benefit of the HIRE Act.

On July 21 Senator Schumer introduced S. 3623 which would extend the period of the exemption through July 2011:

(1) IN GENERAL- Section 3111(d) of the Internal Revenue Code of 1986 is amended–

(A) by striking `with respect to employment during the period beginning on the day after the date of the enactment of this subsection and ending on December 31, 2010,’ in paragraph (1) and inserting `during the applicable period with respect to employment’,

(B) by striking `January 1, 2011′ in paragraph (3) and inserting `July 1, 2011′,

(C) by redesignating paragraph (5) as paragraph (6) and by inserting after paragraph (4) the following new paragraph:

`(5) APPLICABLE PERIOD- For purposes of paragraph (1), the applicable period is–

`(A) with respect to any qualified individual who begins employment after February 3, 2010, the period beginning after March 18, 2010, and ending on December 31, 2010, and

`(B) with respect to any qualified individual who begins employment after July 22, 2010, the period beginning on the day after the date of the enactment of this paragraph and ending on June 30, 2011.’,

Meaning that for qualified employees hired between Feb. 3 and July 22, 2010 businesses would receive the tax exemption through Dec. 31, 2010 and for employees hired after 7/22/10 the exemption would be through 6/30/2011.

On August 4, Michigan Senator Debbie Stabenow, along with prominent co-authors such as Senator Schumer and Leader Harry Reid, introduced S. 3706, “The Americans Want to Work Act.” According to the Senator’s press release:

The Americans Want to Work Act extends through 2011 the successful HIRE Act tax credit, signed into law earlier this year, to encourage businesses to hire workers. The HIRE Act cuts payroll taxes for businesses that hire workers who have been out of work for longer than 60 days and also gives them a $1,000 general business tax credit for each worker employed for at least a year. The Stabenow bill also doubles the tax credit to $2,000 if businesses hire workers who have totally exhausted their unemployment benefits.