HIRE Act of 2010; New Tax Incentives!

When it comes to saving money, every little bit counts. In March of this year, the President signed a new $17.5 billion legislation that includes tax benefits for businesses. The Hiring Incentives to Restore Employment (HIRE) Act provides two possible tax credits for employers who hire qualified unemployed workers.

What's Available?

Tax benefits created by the HIRE Act include two possible incentives.

1. Payroll Tax Exemption - For unemployed workers hired this year (after February 3, 2010 through December 31, 2010), employers can receive a 6.2% payroll tax incentive. This exempts employers from paying the employe;s share of Social Security taxes on wages paid to their new hires after March 18, 2010.
   
2. Employer Tax Credit - Employers may claim a general business tax credit of up to $1000 per previously unemployed worker retained for at least one year. This credit should be filed on the employer's 2011 income tax return.

Am I Eligible?

If you have hired - or intend to hire - unemployed workers during this time period and think you may be eligible for tax credits under the new Act, you must meet specific criteria:

• Workers must be hired after February 3, 2010 and before January 1, 2011.
• Workers must have been unemployed for at least a 60 day period before beginning work or cannot have worked more than 40 hours for anyone during the 60 day period.
• New hires must be employed for either a new position or by filling an existing position by replacing a worker who left voluntarily or for cause.

For more information on HIRE Act qualifications, benefits, and making your claim, visit the IRS website.