Businesses score tax credits for hiring 4.5 million

NEW YORK (CNNMoney.com) -- Businesses have hired an estimated 4.5 million Americans who have been jobless for at least eight weeks, making these firms eligible for approximately $8.5 billion in tax credits, according to a Treasury report released Monday.

The tax credits are part of the $13 billion Hiring Incentives to Restore Employment (HIRE) Act, which Congress passed in March.

Under the act, employers who hire workers who have been jobless for at least 60 days are exempt from the 6.2% payroll tax charged per worker -- for the rest year. In addition, companies can claim a tax credit of up to $1,000 for each employee who stays at least a year.

The administration released the report, which looked at the period from February through mid-May, in hopes of raising awareness about the credit.

The legislation is one of the few job measures that lawmakers have been able to approve this year. However, the measure's actual impact on hiring may be impossible to determine, said Alan Krueger, the Treasury Department's chief economist.

Some 12.2% of the unemployed were hired on a monthly basis after the act went into effect, up from an average of 11%. But Krueger said he wouldn't draw any inferences from that statistic.

"I would be cautious about attributing [additional hiring] to the HIRE Act," Krueger said.

The HIRE Act's goal is to incent companies that are considering adding to their payrolls to do so faster. The administration highlighted a North Carolina yarn manufacturer that has hired more than 30 workers eligible for the tax credit because its business is growing.

Industries that are expanding or have high turnover are more likely to take advantage of the credit, Krueger said.