Hiring incentives took a big leap forward during the Great Recession. The downturn spurred a massive expansion of federal tax incentives for creating and maintaining jobs, largely through the Small Business Jobs Act, The American Recovery and Reinvestment Act, and most notably, the PATH Act.

Because the passing of each jobs law meant that more and more companies became eligible for Employee-based Tax Incentives, today, nearly any business – and nearly any new hire – can benefit from hiring incentives.

Who Qualifies for Hiring Incentives?

Many employers in these industries qualify for hiring incentives. For example:

  • Manufacturers 
  • Software Companies 
  • Architectural / Engineering / Design Groups
  • Pharmaceutical Companies
  • Labs
  • Startup Companies
  • Companies Performing Technical Functions

How are Tax Credits Calculated?

There are many hiring incentives available, depending on where your business is located.

But for example, Employers for Work Opportunity Tax Credits (WOTC) candidates can generally earn a tax credit equal to 25% or 40% of a new employee’s first-year wages (up to the maximum for the target group to which the employee belongs). Employers will earn 25% if the employee works at least 120 hours and 40% if the employee works at least 400 hours. The average benefit per employee is $2,400.  

Also, the Hiring Incentives service (“HI”) is a program designed to find employer tax credits based on certain employer/employee criteria. Due to the variety of criteria, there are many programs that fit into this category. Some of these programs are available through the HIRE Act, which became effective in March of 2010. Some of the hiring criteria to leverage the benefits of this service include enterprise zones, hiring minorities, hiring ex-felons, and hiring seniors. Finally, companies who hire (on average) 100 or more employees per year may receive $500 – $9,000 in tax credits per qualified employee.

Finding all the possible tax incentives for your business begins with a phone call. Request a call today:

Expense Reduction Partners