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Hidden Cash Lying Around The Office

Aug 19, 2010

I would like to thank  Ken Brice of CFO Resources for writing this article and allowing me to showcase his work by contributing it to my blog.  Ken can be reached at KenBrice@CFOResources.com.

Did you know there are programs that the government has set up to incentivized companies to hire?  Of course there’s the highly visible HIRE program which was signed into law on March 18, 2010 by President Obama.  Even though it received a lot of press, many companies are not taking advantage of this free money. 

 There’s a program that’s been around since Bill Clinton’s administration where companies located in Federal Empowerment Zones or Enterprise communities are entitled to federal income tax credits if they hire anyone who lives in the same zone.  There’s an easy way to see if your company is in the zone – go to http://egis.hud.gov/egis/cpd/rcezec/ezec_open.htm , type in your company’s addresses and if you are located in a zone, you could be sitting on a goldmine.

 There’s another federal income tax credit program that’s been around for a long time – the Work Opportunity Tax Credits (WOTC) where hiring someone from a targeted group will generate up to $9,000 in tax credits over a two year window.  Typically people need to be on public assistance to qualify but President Obama included young people who haven’t been working for the 60 days prior to starting work and unemployed veterans.

 In addition, a certain number of people a company hires could be eligible for the Ticket to Work program where the Social Security Administration will pay the employer a subsidy of up to $23,000 in that individual makes at least $1,000 a month and works for 5 years.

 There are also training grants that are available to employers through the Workforce Investment Act which pay for up to 75% of an approved training program.  If you’ve always wanted to put a training program together but couldn’t afford it, this is a way to get it done.

 At the state level and local level there are a number of programs that either reduce your tax bill or generate checks to you, as the employer.  New York City, for example has a program where they’ll pay you, via check, 40% of a qualified person’s gross salary (up to a maximum of $400.00 a month) for 6 months – a total of $2,400.  What’s really amazing is that there are only 70 companies in the city that take advantage of that program.

 Texas has a Texas Back to Work Program where if you hire an eligible person, they’ll pay you, in cash, $800 if that person works between 30 and 60 days, and $2,000 if that person works over 120 days.

 Philadelphia has a unique program where the City will give you credit of $10,000 per year for 3 years if you hire an ex-felon.  That’s $30,000 in Business Franchise Tax credits for each ex-felon.

 California has their version of the Empowerment Zone credits called Enterprise Zones where if you hire a qualified individual, you can recoup a significant portion of their salary over 5 years.

 New York has Empire Zones credits, Pennsylvania has Job Creation Tax Credits,  all states have Renewal Counties, etc.

 There truly is a plethora of credits and subsidies available to employers and I encourage you to research what’s available in your state/city/locale.  Federal Programs are available for every for-profit company and a couple of them are also available for non-profits.  If you are the financial head of a company, these opportunities should be at the top of the list to implement as they truly take very little time to set up and, in most cases, do not cost anything to pick up this free money that’s truly lying around the office.

More from Stu Lipkin…

About the Author

Stu has been helping businesses achieve financial growth and profitability for over 28 years. His experiences as a CPA, chief financial officer, consultant and entrepreneur help him bring a comprehensive perspective to situations faced by his clients. Focused on the opportunities for small to mid-sized businesses, Stu is comfortable either "partnering" with the company's management team or rolling up his sleeves to resolve specific problems. He is comfortable working with owners/senior managers, enjoys coaching and training others, and works well at all levels of the organization.

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