4 Government Programs That Help Small Businesses Hire Employees

The U.S. government aims to stimulate the economy — and chip away at the 9 percent unemployment rate — by offering tax cuts and other incentives to businesses that help create jobs. If you’re looking to add staff but don’t have the revenue stream to do so, the feds (and, in some cases, selected states) may be willing to assist you in hiring and training personnel. Here are four programs that help small businesses bring on new employees.

  1. The Work Opportunity Tax Credit. Available through the Department of Labor, the Work Opportunity Tax Credit reduces the federal income-tax liability of employers who hire workers with “barriers to employment,” including veterans, former prisoners, and people who’ve received welfare or food stamps for a significant amount of time. Employers who hire WOTC-eligible personnel can deduct 25 percent of employee wages from the business’s taxable income for those who work between 120 and 400 hours per year, and 40 percent for those who work 400 hours or more.
  2. The HIRE Act. The HIRE Act, enacted in March 2010, provides tax breaks to employers who hire workers who’ve been unemployed or working part-time for at least two months. Employers who hire eligible staff can claim a tax exemption for the 6.2 percent payroll tax per qualified worker. They may also claim an additional $1,000 credit for each qualified worker they’ve employed for at least a year.
  3. Enterprise Zone Incentives. If your business is located in an economically depressed area, you’ll be eligible for tax breaks for starting and expanding your business there. Enterprise Zone regulations vary from state to state, but you’ll generally be allowed to deduct a percentage of many types of expenses, such as a vacant-building rehabilitation credit and a job-training tax credit. Visit your state government’s website and search for “enterprise zone” to find out which regions qualify and what tax breaks are available.
  4. State Workforce Training Funds. Workforce training grants are available in some states to encourage employers to train unskilled workers and keep jobs within the region. For example, Massachusetts provides grants of up to $250,000 for training current and new employees, and Texas offers up to $500,000 for businesses that partner with local colleges to train workers. Visit your state’s economic development agency website to find out what local programs are available.

About Kathryn Hawkins

Kathryn Hawkins is a principal at the content marketing agency Eucalypt Media. She's written about business, marketing, and entrepreneurship for publications including BNET, TheAtlantic.com, Inc.com, and owns and operates the positive news site Gimundo. Follow her on Twitter at @kathrynhawkins.
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3 comments
janice m. tyson
janice m. tyson

how do I get infomation on the 4 goverment programs to help a small business to hire?

janice m. tyson
janice m. tyson

I am an insurance broker of 26 years and been an independent broker for 7 years. I am in need of an administrative assistant or exective assistant that I am willing to help obtain their education in the insurance market by obtaining certified accredites for online training to increase their associates degree or bacholars degree to a higher level along with experiance. I am in need for someone full time,but not able to pay for full time assistant at this time and is seeking funding. I plan to expand to hire other agents to train as well. Any information to help me will be well appreciated.

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