Hiring Incentives to Restore Employment (HIRE) Act provides Employer Relief - Tax Tip of the Week | No. 40

New Law Provides Employer ReliefA new law was recently passed called The Hiring Incentives to Restore Employment (HIRE) Act.  The HIRE Act is a $17.5 billion dollar plan that is intended to accelerate the hiring of unemployed workers and further stimulate this uncertain economy.The law provides relief from the employer share of social security tax payments up to $6,621.60 (6.2% of the $106,800 FICA wage cap).The employer is still obligated to pay the Medicare portion of the payroll taxes, the regular tax withholding payments and the employee share of FICA and Medicare.  The “credit” is taken when the employer files their Form 941 payroll tax returns.Employers are eligible to take this credit for new hires that have been unemployed for at least 60 days.  Employment must begin after February 3, 2010 and before January 1. 2011.In addition, the bill provides a $1,000 credit to the employer if the new hire is employed for at least 52 consecutive weeks.  This credit would be taken on the employer’s 2011 income tax return.As always, careful record keeping must be done to take advantage of these tax incentives.  You will definitely want to give us a call if you know of anyone looking to hire new employees.Questions? Just give us a call. In Dayton, call 937-436-3133 and in Xenia, call 937-372-3504. Or visit http://www.bradstreetcpas.com. Rick Prewitt - the guy behind TTW...until next week.