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Senate Tax Credit Could Generate Up to 18,000 New Nonprofit Jobs

February 10, 2010, 11:41 am

A tax credit that is part of a draft jobs bill that the U.S. Senate is now considering could provide $1-billion in benefits to nonprofit groups and generate from 8,000 to 18,000 new nonprofit jobs, according to an analysis by the Alliance for Children and Families.

The measure — drawn up by Sens. Charles E. Schumer of New York and Orrin Hatch of Utah — would exempt private employers, including nonprofit groups, from paying their share of Social Security taxes for employees they hire through the end of 2010. The new hires must have been out of work for at least 60 days.

They would get an additional $1,000 bonus if they kept the employee on the payroll for a full year.

The Alliance for Children and Families — an association of human-services groups — used Congressional Budget Office analyses on the impact of job tax credits to estimate how the proposal would affect nonprofit jobs, which make up about 10 percent of the work force.

Patrick Lester, the group’s senior vice president for public policy, writes on the blog Washington Insider that the estimates could even be low because, unlike in the business world, demand for nonprofit services — and the people to provide them — rises during hard times.

Furthermore, nonprofit employers cannot siphon off tax credits as profits, meaning if they get tax credits for people they were planning to hire anyway, they are more likely than for-profit employers to use the savings to expand or keep jobs in other parts of the organization.

He acknowledges, however, that other factors inhibit nonprofit employers from hiring, like cuts in government spending and private giving during a slow economy.

The Senate bill has not yet been officially unveiled. President Obama has offered a different proposal that would give nonprofit and other employers a $5,000 federal tax credit for every net new employee they add in 2010 and reimburse them for any taxes they owe to Social Security because they have a bigger payroll.

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0 Responses to Senate Tax Credit Could Generate Up to 18,000 New Nonprofit Jobs

johnkollaer - February 10, 2010 at 1:13 pm

Come on!! Dont you see how this is just hype??? What happens after the first year. Do we fire those employees becasue we can no longer afford to pay them? This isn’t creating any long term jobs. This is just providing the administration with numbers they can use to tell the people “We have created xxx number of jobs in the non-profit world.” Don’t foget who will actually pay for these jobs, the tax payer!!! God have mercy on us as a nation.