Small Business Can Cash In with Tax Cuts and Credits for Hiring

There are 2 tax acts currently in place that will allow employers to benefit from hiring new employees. The first is through the State of Illinois. We posted an article about it but its worth bringing up again.

 

Small businesses that create new jobs between July 1, 2010 and June 30, 2011 may be able to take advantage of a $2,500 tax credit for new hires. The Illinois Small Business Job Creation Tax Credit is a $2,500 tax credit is available to businesses with 50 or fewer employees (including all locations) as of June 30, 2010. New small businesses hiring their first Illinois employee(s) may also qualify for the credit. Those businesses that began hiring on July 1 may apply for the credit retroactively.

 

The Illinois Department of Commerce and Economic Opportunity created a
simple, easy-to-use online registration system for small business owners at
JobsTaxCredit.illinois.gov. Eligible companies should register new positions
online as soon as a new, full-time Illinois employee is hired and begins
providing services. After one year, companies can use the website to enter
substantiating data and apply for their tax credit certificate. Tax credit
certificates will be awarded beginning July 1, 2011. The total amount of
credits issued is capped at $50 million, which will support 20,000 jobs. – Press Release, Office of Governor Pat Quinn

 

The second is a tax cut and credit; its a federal program. The HIRE (Hiring Incentives to Restore Employment) tax exemption offers an IMMEDIATE benefit to employers that hire employees that have been out of work for 60 days or more are exempt from paying their share of social security payroll taxes, which is 6.2%. This exemption expires at the end of the year, so DO NOT DELAY.

 

In addition to exempting employers from these payroll taxes, the HIRE Act allows employers to claim a tax credit of up to $1,000 for each newly hired qualifying worker who is retained for one year. To read more about the HIRE ACT, visit the IRS here

 

With both tax breaks, on a salary of $40,000, that’s over $5,000 that could be saved. These efforts are with the hopes of stimulating hiring. What say you small business owners? Have you found these tax breaks and credits motivating enough to hire new staff?