State to pay small businesses to start hiring

Chris Kirk

Evanston small business owners can now earn tax credits for hiring new employees after the governor on Tuesday signed into law a bill aimed at stimulating job growth.The bill allows owners of small businesses to apply for a state income tax credit of up to $2,500 for each new full-time employee they hire between July 1, 2010 and June 30, 2011.

The tax credit is only available to businesses with no more than 50 full-time employees, and only full-time employees paid at least $13.75 an hour are counted.

Additionally, the employment of a new worker must result in a net increase in the total number of full-time employees a business claims for the business to be eligible. The business must also sustain that increase for at least 12 months to apply for the tax credit.The state legislature, which passed the bill unanimously, intends it to mitigate the impact of the state’s economic recession on the labor force, according to the act.”The Illinois economy is mired in one of the worst economic recessions it has ever suffered,” the bill reads. “Small businesses in particular have been hit hard by the economy, resulting in levels of high unemployment throughout the state. In order to reverse the trend of high unemployment and to help spur the economy to recovery, it is necessary to assist and encourage small businesses in the hiring of new employees.”The state may only disseminate $50 million in job creation tax credits. If there isn’t enough credit to go around, the applicants will be considered on a first-come first-served-basis.