Hire Act Provisions

On March 18th, 2010 President Obama signed the Hiring Incentatives to Restore Employment (HIRE) Act. While the legislation contains various tax breaks to encourage businesses to hire unemployed workers, there are only a few provisions that will impact the average return. The two that impact most of our clients are an exemption for employers that hire qualified unemployed workers and a general tax credit for employers that retain qualified workers.

Payroll Tax Incentives

Qualified Employers that hire qualified unemployed workers after February 3, 2010 and before January 1, 2011 may qualify for an "exemption" from paying the matching 6.2% social security tax on wages paid after March 18, 2010 and before January 1, 2011. Qualified unemployed workers must certify that they have not been employed for more than 40 hours during the 60 day period ending on the date that employment starts. There are other rules to this incentitive, call to find out the details if you intend to use this tax break.

Employment Tax Credit

Employers may claim a general business credit for a portion of the wages paid to qualified retained employees. The credit is the lesser of 6.2% of the applicable wages or $1000. The employee must be employed by the employer for at least 52 weeks and there are other requirements. Becasue of the 52 weeks and February hire date, the credit will be availalbe on the 2011 tax returns. Please call us if you have any questions on the HIRE Act.