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Employer Payroll Tax Incentives |
In June 2009, NISH awarded Mathematica Policy Research a contract to conduct a study that explores the use of an employer payroll tax credit as a means of providing employers with stronger incentives to hire people with disabilities.
Employers that meet specified hiring targets for current and former Social Security disability program beneficiaries can apply the credit to the employer's share of FICA taxes paid on all employees. The credit is structured to be budget-neutral to the federal government in that the expected amount of the tax credit across all employers would be less than or equal to the federal savings achieved through reduced reliance on public support programs resulting from greater employment of people with disabilities.
The research for this project is broken down in three phases:
Phase 1 (complete)
Mathematica developed a preliminary model of a budget-neutral employer payroll tax credit. Using this model, Mathematica estimated the potential cost savings to the federal government of employing people with disabilities, assessed how those savings might be translated into a payroll tax credit, tested the sensitivity of the estimates to changes in model parameters, and developed a preliminary intervention (described below).
Phase 2 (in progress)
Mathematica is now in Phase 2 of the study. Staff are conducting field research to gather additional information to further refine the model and develop specific options for the policy intervention.
Phase 3
In the final phase of the study, NISH and Mathematica will design and conduct a demonstration and evaluation of the tax incentive with the goal of generating rigorous empirical evidence that a well-designed, budget-neutral policy intervention could increase the employment of people with disabilities.
To find out more about this project, contact Brian DeAtley at
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