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Checking In on the Job Creation Tax Credit
10-07-2010
Tagged Under : Creation Tax, Creation Tax Credit, Credit, Tax Credit
It’s still too early to know whether the job creation tax credit signed into law last March is having any effect, Treasury Department officials said on Monday.
This tax program, part of the Hire Act of 2010, is intended to encourage businesses to add workers who have been out of a job for at least 60 days by making it cheaper to employ them.
Usually, the federal government collects Social Security payroll taxes on salaries, amounting to 12.4 percent of every employee’s wages (up to $106,800; any wages over that amount are not subject to Social Security taxes). Half of this payroll tax, or 6.2 percent, comes from the employee, and the other half, or another 6.2 percent, is collected from the employer.
Under the Hire Act, businesses that hire the long-term unemployed do not have to pay this 6.2 percent tax on each worker for the remainder of 2010. Addit