On March 18, 2010 the Hiring Incentives to Restore Employment (HIRE) Act was enacted. The HIRE act contains two new tax benefits that are available to employers who hire certain previously unemployed workers (the Act calls them “qualified employees”).
The first, referred to as the payroll tax exemption, provides employers with an exemption from the employer’s 6.2 percent share of social security tax on wages paid to qualifying employees, effective for wages paid from March 19, 2010 through December 31, 2010.
The payroll tax compliance issues here are a bit daunting.
The second tax benefit is that for each qualified employee retained for at least 52 consecutive weeks, businesses will also be eligible for a general business tax credit, referred to as the new hire retention credit, of 6.2 percent of wages paid to the qualified employee over the 52 week period, up to a maximum credit of $1,000.
If you have questions about qualifying for the tax credits under the HIRE Act, contact Paul by clicking here.