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New Plan Offers Tax Break for Hiring Felons

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By Cynthia Hsu, Esq. on October 20, 2011 9:44 AM

Businesses everywhere, take note: employers in San Francisco may soon be seeing some financial incentives for hiring felons. The city is considering a new legislation where employers will get a $10,000 tax break for felon employees.

San Francisco is not the first city to consider this type of legislation. Philadelphia has had similar rules on its books since 2007.

In fact, in 2009 the Philadelphia Eagles turned down a $10,000 tax credit when they hired an ex-felon: Michael Vick. Considering Vick's contract comes in at a hefty $1.6 million, it's not like the $10,000 would make or break the NFL team's budget. But for small businesses, $10,000 can be a vital lifeline.

Why the new policy? Typically, it can be difficult for felons to find work. This is especially true compared to those with unblemished records.

There's also a social reason for implementing this new tax break. Encouraging businesses to hire felons can reduce the recidivism rate, the rate in which ex-convicts end up committing crimes again.

Some studies have shown that recidivism rates can be slashed in half for felons who find work, according to the San Francisco Chronicle.

But before you commit to hiring felons, you should pause. Make sure doing so won't violate the law or open your business to legal liability. If you're running a business that employs costumed actors to appear in children's birthday parties you probably shouldn't hire felons convicted of child molestation.

Also there are some industries that are strictly forbidden from hiring ex-felons, such as some social work fields.

While the San Francisco legislation would be new, tax breaks for felons isn't exactly a novel concept. Besides Philadelphia, the federal government has been offering similar benefits for employers hiring felons for years. Illinois, Iowa and Maryland also have similar programs, according to The San Francisco Chronicle.

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