Jobs Creation Proposals
The Senate passed the $15 billion jobs package on Wednesday on a bi-partisan basis by a vote of 70 to 28. The Jobs for Main Street bill contains the Schumer/Hatch job-creation credit that allows nonprofit and for-profit employers to avoid paying the 6.2% Social Security payroll tax for the remainder of the year for individuals hired who have been unemployed for more that 60 days. Because the tax forgiveness program focuses on the payroll taxes that all employers pay, nonprofits would be eligible to participate. The House reportedly will act quickly to pass this bill.
Earlier this month, President Obama announced his more expansive proposal to spur hiring by employers, which also includes nonprofits. As part of the President’s job-creation plan, businesses and nonprofits would get a $5,000 payroll tax credit for every new employee they hire in 2010. In addition, if a nonprofit or for-profit organization increases the hours or wages of employees earning less than $106,800, the employer would also be reimbursed for the additional Social Security taxes incurred.
The Senate is expected to take up a second jobs bill in the coming weeks. That bill will likely contain the key elements of a bi-partisan package negotiated by Finance Committee Chairman Max Baucus (D-MT) and Ranking Member Charles Grassley (R-IA). Among provisions of interest to nonprofits are extensions of the IRA rollover and other charitable giving incentives and relief for nonprofit and for-profit sponsors of defined benefit pension plans.