On February 24, the Senate passed legislation designed to reduce the unemployment rate by providing a tax credit for hiring unemployed workers. The bill extends tax credits to a wide variety of nonprofit organizations, including associations, philanthropic organizations, universities, and other nonprofit organizations as well as for-profit businesses.
The legislation would allow employers that hire a worker who has been unemployed for at least 60 days to avoid paying that worker's Social Security tax for 2010. This provision has the effect of an immediate tax credit, as the longer the employer employs a person and the more they pay that person, the larger a break they receive on their Social Security payments. If that worker is retained for at least 52 weeks, the business receives an additional $1,000 tax credit on its 2011 payroll tax.
Nonprofits, like other employers, pay a payroll tax for their employees, and thus can benefit from the tax break provided by this legislation. ASAE advocated for this language during the development of the legislation and reports that it is pleased the Senate has included equitable treatment for the nation's tax-exempt community. ASAE had advocated for the same equitable treatment in the health care legislation that gives small employers a subsidy for providing insurance coverage to employees.
"The Senate job legislation codifies what we have long shown through our initiatives such as the Power of A campaign, mainly that associations and nonprofit are sources for this nation's economic recovery," said John H. Graham IV, CAE, president and CEO of ASAE & The Center. "The bill allows nonprofits the financial flexibility to hire association professionals that have a highly-developed skill set. These employees can then use their talents on behalf of the nonprofit to spur economic recovery within their industry."