Posted by: Nick Leiber on August 3, 2010
Two months ago, we wrote about Blinds.com, a Houston blinds e-tailer that was struggling to determine whether to hire additional workers. The boss, Jay Steinfeld, told us his business was profitable and had “plenty of cash,” so he could afford to take on new staff. But he was worried about the state of the housing market, crucial for any home furnishings retailer. Government initiatives weren’t top of mind.
Still, as we talked, he did acknowledge that his team was taking into consideration some of the Obama Administration’s incentives to hire. His CFO, Marilynne Franks, said that the Hiring Incentives to Restore Employment Act’s tax credit for hiring unemployed workers, which took effect in March, would soon be paying off for the company. She figured Blinds.com would be eligible for tax credits for 8 or 10 of the 35 employees it had brought in since the beginning of the year.
By way of background, the HIRE Act works like this, per the IRS website: Employers who hire unemployed workers this year (after Feb. 3, 2010 and before Jan. 1, 2011) can qualify for a 6.2-percent payroll tax incentive, in effect exempting them from their share of Social Security taxes on wages paid to these workers after March 18, 2010. In addition, for each worker retained for at least a year, businesses may claim an additional general business tax credit, up to $1,000 per worker, when they file their 2011 income tax returns.
Now, as WebCPA reported yesterday, the Treasury Department has just updated its monthly estimate of eligible workers, showing that from February 2010 to June 2010, businesses hired 5.6 million new workers who had been unemployed for eight weeks or longer. That means the businesses that hired them are eligible to receive up to an estimated $10.4 billion in HIRE Act tax exemptions and credits.
The IRS form to claim the exemption is available here.