AHLSTARZ Tax and Accounting Service -- Numbers, Simplified.

The Senate on February 24 approved, by a 70-to-28 margin, a $15-billion jobs package that Democrats hope will be the first of several successful job-related measures to pass over the next several months. Thirteen Republicans joined Democrats in voting for the bill and Senate Majority Leader Harry Reid, D-Nev., plans to soon release a second jobs-related package that would extend several expiring tax breaks favored by small businesses.

The Hiring Incentives to Restore Employment (HIRE) Bill (HR 2847) provides a payroll tax break for new hires and a $1,000 credit is also provided for any employee who qualifies for the payroll tax holiday and who remains continually employed for 52 weeks by an employer. The estimated cost of the proposal is nearly $13 billion over 10 years.

In addition, the legislation provides for an extension of the Build America Bonds program to existing tax credit bonds, an extension of highway authorizations, and a one-year extension of higher Code Sec. 179 expensing thresholds. These measures are entirely offset by revenues raised from the Foreign Account Tax Compliance Bill (Sen 1934) and a one-year delay in the application of Worldwide Interest Allocation rules.

Reid's second jobs bill is still being worked on but it is expected to contain roughly $30 billion in tax extenders, as well as extensions of multiple provisions of current law, including unemployment insurance (UI), COBRA, the PATRIOT Act (P.L. 107-56), several small business provisions from the American Recovery and Reinvestment Act of 2009 (P.L. 111-5) and a package of Medicare extenders. Democratic leaders were planning as of February 24 to quickly pass by unanimous consent a short-term extension of UI and COBRA benefits, which are set to expire on February 28.

The bill now moves to the House where it is unclear whether that chamber will advance the Senate measure without making changes. The House had previously passed a $150-billion jobs package in December 2009 (TAXDAY, 2009/12/17, C.1) that placed greater emphasis on federal funding for building projects.

Source: CCH