Nearly 2 million companies that make new hires or increase wages would receive a tax credit under the small business hiring income tax credit President Obama is calling on Congress to pass.
The tax credit, the third item on President Obama’s job-creating To-Do List for Congress, would encourage more than $200 billion in new hiring and pay raises by providing a 10 percent income tax credit on wages added in 2012. The credit would be available to all companies, but would be capped at $500,000 per business to specifically spur small business hiring. And, companies that claim the credit would be able to do so on a quarterly basis, which means businesses would see tax relief sooner rather than later after making new hires.
By providing targeted tax relief to the businesses that are expanding and making investments in their workforce, the Small Business Hiring Credit will grow the economy, create jobs, and strengthen the recovery. In fact, the Congressional Budget Office recently found that this type of targeted credit is the single most effective business tax option for boosting hiring and spurring economic growth.