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HIRE Act 2010
Under the Hiring Incentives to Restore Employment (HIRE) Act enacted March 18, 2010, two new tax benefits are available to employers hiring certain workers between February 4, 2010 and January 1, 2011.
1. If your business hires a qualifying previously unemployed or part-time individual, you may be eligible for a tax exemption.
The basic employee qualifications for the tax exemption are as follows:
- Begins working between February 4, 2010 & December 31, 2010.
- Worked less than 40 total hours in the previous 60 day time period and signs a statement (IRS form W-11) certifying that this is true.
- Was not hired to replace another employee unless that employee left the position voluntarily or was terminated for cause.
- Is not a relative of the employer.
For these qualifying employees, the employer is provided an exemption from the employer’s 6.2% share of the social security tax.
2. You may also qualify for the New Hire Retention Credit.
The HIRE Act increases the general business tax credit for each employee that meets the above qualifications and the following:
- The employee is retained for at least 52 consecutive weeks.
- The employee’s pay in the second 26 week period must equal or exceed 80% of the pay in the first 26 week period.
Employers are eligible to receive this tax credit for each employee meeting the above criteria in the amount of the lesser of either $1000 or 6.2% of the wages paid to the employee over the 52 week period.
Opportunities to educate yourself about the new tax incentives: