U.S. Sen. Chris Murphy, acting state Labor Commissioner Dennis Murphy, Hartford Mayor Luke Bronin, and Tom Phillips, president and CEO of Capital Workforce Partners celebrated the reauthorization of the long-term unemployed tax credit Wednesday.
The tax credit was renewed as part of the tax package Congress approved last month. It provides additional incentives to businesses to hire workers who have been unemployed for six months or longer.
The tax credit, which expired in 2014, was made retroactive so that businesses that hired people who had been long-term unemployed in 2015 can still take advantage.
“Creating a new job is not always an easy decision for businesses. This tax credit — which passed Congress with bipartisan support — may make the difference for Connecticut businesses that are thinking of hiring new workers,” Murphy said.
The Work Opportunity Tax Credit provides employers with a tax credit worth between $1,200 and $9,600 per employee. The recently passed tax package also adds $2,400 to the first year of wages paid to that employed worker.
The slow pace at which the long-term unemployed have been able to find work has been one of the “unique” things about this recession, Murphy said.
An estimated 90,000 Connecticut residents were unemployed for six months or more at the depth of the recession.
“We need to target help to those who have been out of work,” Murphy said.
Acting state Labor Commissioner Dennis Murphy said the five-year reauthorization allows them to dig into the 30,000 applications they’ve had on hiatus.
Murphy said the tax credits will help motivate employers to hire folks who have been out of work for a long time.
Phillips said Connecticut is the seventh oldest state in the country and it has to be thinking about the workforce that’s going to replace the Baby Boomers.
The replacement workforce is going to come from “veterans and people with disabilities. It’s going to come from offenders and other populations,” Phillips said. This tax credit is going to be a “bridge” to help get those folks back into the labor force by incentivizing employers to hire these folks, he said.
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Bronin said that in the northeast part of the city where the American Jobs Center is located unemployment is still 27 percent, which is greater than it was during the Great Depression.
“There is nothing more important than trying to create job opportunities for residents of this neighborhood and residents in similar circumstances all over the state,” Bronin said.
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