Today is the first day where the payroll tax exemption extension, enacted into law last month, officially goes into effect. As is often the case in these high profile White House-Congress legislative battles, a number of other provisions got tacked onto the final payroll extension package. The mix of other provisions includes, among other things, a requirement for formal Presidential certification before going ahead with the Keystone XL Pipeline and a welcome extension of more favorable expensing and depreciation rules for new propety and capital investments. You can access the new law here.
Another welcome provision in the law (Section 2124) concerns the US Department of Labor’s Self-Employment Assistance (SEA) programs. The SEA program allows states to continue providing benefits to the unemployed while they are starting a business. In most cases, unemployment rules bar this move and require recipients to instead search for full-time employment. The SEA program is currently voluntary and requires states to formally apply to participate. At present, only Delaware, Maine, New Jersey, New York, Pennsylvania, Oregon, and Washington have SEA programs.
The new law, based on legislation originally proposed by Sens. Wyden (D-OR), Carper (D-DE), and Casey (D-PA) makes it easier for states to create SEA programs. Under the new rules, state SEA programs simply require a signed agreement between a state Governor and the US DOL. In addiiton, the law provides $35 million to assist new states seeking to create SEA programs.
Starting a new business is not for everyone, and may be especially difficult for many unemployed people. But that doesn’t mean that they shouldn’t have the option if they have the desire and capacity to be an entrepreneur. This important rule change will provide an opportunity for potential business owners across the US who want to leave unemployment by making a job as opposed to taking a job.