Resources | Newsletter Archive | Newsletter Subscription Info | Refer a Friend | Ask the Expert

Employers May Be Eligible for Tax Break Under HIRE Act by HR Hero Alerts The Hiring Incentives to Restore Employment (HIRE) Act (H.R. 2847), a jobs bill President Barack Obama signed into law on March 18, 2010, provides tax breaks to employers that hire unemployed workers or individuals who were only working part-time in 2010. Under the HIRE Act, qualified employers could receive a payroll tax incentive and a general business tax credit. Payroll Tax Incentive Under the Act, employers that hire new employees this year may be exempt from paying the 6.2 percent social security tax on wages paid to qualified employees after March 18, 2010, through December 31, 2010. An employee is "qualified" if she: starts work after February 3, 2010, and before January 1, 2011; certifies in a signed affidavit that she hasn't been employed for more than 40 hours during the previous 60-day period (the 60-day period ends on the date the employee starts work); wasn't hired to replace another employee unless the other employee voluntarily left the position or was terminated for cause; and isn't a family member or other relative of the employer. All employers are qualified to receive the payroll tax incentive except for federal and state governments or any of their political subdivisions or instrumentalities. However, public institutions of higher education are eligible to receive the tax incentive. Employers can claim the payroll tax exemption on the federal employment tax return they file with the IRS. A qualified employer may also elect out of the exemption, and the secretary of the Treasury is supposed to determine how to make such an election. General Business Tax Credit Employers may also be eligible to receive a tax credit for a qualified employee under the HIRE Act if: the employee was retained for at least 52 consecutive weeks; and his wages during the last 26 weeks of the 52-week period were at least 80 percent of his wages for the first 26 weeks of that period. The tax credit is equal to the lesser of: $1,000; or 6.2 percent of the wages paid by the employer to such a retained worker during the 52-consecutive-week period discussed above. http://employmentlawpost.com/hrnews/2010/03/24/employers-may-be-eligible-for-tax-break-under-hire-act/?HLR