Update on Tax Credits for Hiring the Unemployed

Update on Tax Credits for Hiring the Unemployed

As reported here a few months ago, part of the federal stimulus package consisted of a tax credit for employers who expanded their workforce, and filled the new slots with people who had been receiving unemployment benefits. The plan provided multiple benefits: people on the unemployment rolls become more attractive at a time when many are finding their unemployment status as a stigma, the unemployment rolls decrease, lessening the burden on a bulging system, and employers find it easier to express optimism in the future when the government kicks in a $5,000 tax credit per hire.

Unfortunately, not many people have benefited. According to the U.S. Treasury, only 238 employees were hired in Maryland under this plan, from February through July. The program has room for Maryland companies to hire 4,000 workers through the end of the year; the local economy is unlikely to use all of these credits. That failure seems more associate with lack of awareness of the available tax breaks, however, since hiring is up since January. Maryland’s Department of Labor, Licensing and Regulation has a link to information on the program on its home page.

Of course, the federal government may choose to extend the program; as businesses begin tax preparation the credit may become more well-known.

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