Paul E. Suplizio, President of the WOTC Coalition, in a private correspondence to coalition members, informed us on Friday that the Jobs for Main Street Act (H.R. 2847) is schedule for a vote by the U.S. Senate on Monday afternoon. The bill will include an important amendment, Senate Amendment 3310, by Senate Majority Leader Harry Reid.
If passed, SA 3310 will create a Payroll Tax Forgiveness program, (aka the Payroll Tax Holiday) for employers who hire certain unemployed workers. Specifically, employers will enjoy a tax holiday eliminating the 6.2 percent employer tax expense on wages paid to qualifying employees after the date of the bill’s anticipated passage through the end of 2010.
“Unemployed” in this context means that an individual has worked no more than 40 hours during the 60 days prior to his or her start date with the new employer. The new worker must sign an affidavit stating as much, under penalty of perjury.
In addition to the Payroll Tax Forgiveness, SA 3310 also provides for a $1,000 income tax credit for employers if they retain these previously unemployed individuals for at least 52 weeks of employment.
There are some limitations. For one, an employer cannot claim both Payroll Tax Forgiveness and the WOTC tax benefit for the same employee based on wages paid during the first 12 months of employment. Presumably, this means that employers can claim WOTC on second-year wages paid to employees Certified under WOTC Category I (which provides for a 2-year tax credit).
Also, unlike other general tax credits (like the WOTC), which can be carried back one tax year, the $1,000 income tax credit cannot be carried back.
It’s interesting to note that the language of Senator Reid’s amendment is identical to the language co-sponsored by Senators Chuck Schumer (D, New York) and Orrin Hatch (R, Utah) in the Hire Now Tax Cut Act of 2010.