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Two New Tax Benefits Good News for Unemployed

By: Chris Carlson

Aimed at providing hiring incentives to restore some of the jobs lost in the latest economic recession, and to help put Americans back to work as soon as possible, the IRS recently updated language in the HIRE (Hiring Incentives to Restore Employment) Act, which offers employee hiring tax incentives to businesses, established in March 2010.

This new $17.5 billion legislation (scaled down from an earlier $150 billion package) offers new tax benefits directly related to hiring employees and writing off business investments in equipment.

Employers who hire unemployed workers this year (after Feb. 3rd, 2010 and before Jan. 1, 2011) may qualify for a 6.2 percent payroll tax incentive and for each worker retained for at least a year, businesses may claim an additional general business tax credit, up to $1,000 per worker, when they file their 2011 income tax.

Eligible Employees

  • Must be hired between Feb 3, 2010 and January 1, 2011
  • Must have NOT been employed for more than 40 hours in the 60 days prior to their hire date

Although the economic recovery continues to be a slow process, as of July an estimated 4.5 million workers, who have been unemployed for an average of 10 months, have been hired as a result of the HIRE Act, according to a recent New York Daily News post.

For many employers on the fence regarding whether or not to hire, the HIRE Act is a welcome incentive to make the decision in favor of adding new employees. Now more than ever is the time to improve upon your resume and practice interviewing in order to capitalize on these favorable hiring incentives and to put yourself above other candidates.