Bill Would Provide Employers With Tax Credit for Hiring Unemployed Workers

Sen. Sheldon Whitehouse, a Democrat from Rhode Island introduced a measure earlier this month intended to encourage business to hire unemployed workers by providing businesses with tax credits for doing so. The Job Creation Tax Credit Act of 2011 (S. 1271) amends provisions in the 2010 HIRE Act. It gives employers who hire workers who were previously unemployed refundable tax credits based on their wages.

The credits would start at of 15% of 2011 wages and drop to 10% in 2012. If passed, the bill would take effect immediately and last until January 1, 2013. Qualified individuals would be those hired during that period who have not been employed for more than 40 hours during the previous two months. The bill includes a clause ensuring workers hired under the bill cannot be used to replace anyone currently employed unless that employee left work voluntarily or was fired for cause.

Sen. Whitehouse has stated that the bill is intended to reduce the cost and risk of hiring new workers during an economically uncertain time and that 'by providing refundable tax credits for new hires, this bill will help businesses hire the workers they need to expand." The bill was referred to the Senate Committee on Finance.

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