On March 18, President Obama signed a bill carrying the Hiring Incentives to Restore Employment (HIRE) Act, into law. The HIRE Act offers businesses incentives to hire unemployed workers and awards business who have retained employees over the past year. Although details of the Act have not received publicity due to the health care bill, the Act should not be ignored by businesses.
The HIRE Act exempts employers from paying the employer share of Social Security employment taxes on wages paid in 2010 to newly hired qualified unemployed workers. These are workers who: (1) begin employment with the employer after February 3, 2010 and before January 1, 2011, (2) were previously unemployed and (3) do not replace other employees of the employer. The payroll tax relief applies only for wages paid with respect to employment beginning on the day after March 18, 2010 and before 2011.
The HIRE Act also provides employers with an up-to-$1,000 tax credit for retaining qualified unemployed workers. The workers must be employed for a period of not less than 52 consecutive weeks, and their wages for such employment during the last 26 weeks of the period must equal at least 80% of the wages for the first 26 weeks of the period.
Although the rules and regulations to qualify for and to claim these credits are being worked out, businesses and business advisors should begin working closely together to take full advantage of the tax credits offered in the act.
(This article contains the current opinions of the author but not necessarily those of Brighton Securities Corp. The author's opinions are subject to change without notice. This blog post is for informational purposes only. Forecasts, estimates, and certain information contained herein should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. References to specific securities and their issuers are for illustrative purposes only and are not intended and should not be interpreted as recommendations to purchase or sell such securities).