February 24, 2010

Senate Approves Tax Credits For New Hires

Legislation that would extend tax credits for new hires at nonprofits as well as for-profit business cleared the U.S. Senate this morning. The 70-28 vote sets up an expected conference to iron out differences with the House of Representatives’ version of the bill before sending it to President Barack Obama.

The Senate’s $35 billion proposal includes provisions to boost job growth but leaves several measures, including help for the unemployed, for future legislation.

Employers that hire a worker who has been unemployed for at last 60 days would be exempt from paying the 6.2 percent Social Security payroll tax this year. In addition, the employer would get a $1,000 tax credit for 2011 if new employees remain employed for a full year.

“The Senate job legislation codifies what we have long shown through our initiatives such as the Power of A campaign, mainly that associations and nonprofit are sources for this nation’s economic recovery,” said American Society Association Executives (ASAE) & The Center President and CEO John H. Graham IV. “The bill allows nonprofits the financial flexibility to hire association professionals that have a highly-developed skill set. These employees can then use their talents on behalf of the nonprofit to spur economic recovery within their industry.” ASAE advocated for this language during the development of the legislation.

Nonprofits, like other employers, pay a payroll tax for their employees, and thus can benefit from the tax break provided by this legislation.

ASAE had advocated for the same equitable treatment in the health care legislation that gives small employers a subsidy for providing insurance coverage to employees.