Last week President Obama presented The American Jobs Act to a joint session of Congress. The Act includes a number of measures, all billed at helping the still reeling economy and in particular the job market. In addition to allocating money to schools, for projects to improve infrastructure and modifications to unemployment insurance, the Act contains a number of tax provisions.
The Act calls for payroll taxes to be cut in half on the first $5 million in payroll. The White House says this will cover 98% of businesses in the country. The Act also calls for an elimination of the payroll tax for firms that increase their payroll by adding staff. This measure is currently capped at $50 million in payroll increases.
The 100% expensing measure passed as part of the extension of the Bush Tax Cuts last winter would be extended through 2012. The Act also contains a number of additional reforms and regulatory reductions to help entrepreneurs and small businesses.
For workers, the Act will cut payroll taxes in half for 160 million workers in 2012, extending the payroll tax cut passed last winter.
As with any legislation, the American Jobs Act is likely to change before (and if) it becomes law.
For more information on the American Jobs Act, payroll taxes, or other tax related legal concerns, contact the Chicago tax lawyers at Horowitz & Weinstein.