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Hiring Incentives to Restore Employment Act of 2010
On March 18, 2010, President Obama signed into law the "Hiring Incentives to Restore Employment Act of 2010" (H.R. 2847)." This new bill primarily contains tax breaks for employers to hire unemployed workers. Below is an explanation of the most popular topics in this new bill. Payroll Tax Forgiveness Qualified employers who hire certain unemployed workers after February 3, 2010, and before January 1, 2011, may qualify for an exemption of the "employer's share" of the Social Security payroll tax which is 6.2%. It applies to wages paid after March 18, 2010 and before January 1, 2011. Qualified "employees" are individuals who: Begin employment with the employer after February 3, 2010, and before January 1, 2011, Certifiy by signed affidavit under penalties of perjury, that he or she has not been employed for more than 40 hours during the 60-day period ending on the date employment began, Is not hired to replace other employees of the employer unless the employee quits or was terminated for cause, AND Is not related to the employer in a way that would make the employer ineligible for the work opportunity credit. Such relationships are defined under Internal Revenue Code  Section 3111(d)(3). The newly hired employee will need to complete New IRS Form W-11, "Hiring Incentives to Restore Employment (HIRE) Act Employee Affidavit", to confirm that they are a qualified employee under the HIRE Act. Employment Tax Credit for Employers Employers may claim a general business credit for a portion of the wages paid to qualified retained employees. Qualified employees have the same definition for purposes of this credit as for the payroll tax forgiveness provision. The workers must be employed by the employer 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. The credit equals the lesser of 6.2% of the wages paid during the 52-week period, or $1,000. The credit cannot be carried back but may be carried forward. Section 179 Expense Increased Click here for more information. Other Provisions of the Tax Act Corporate estimated tax payments increased Off-shore compliance issues View the Entire Act (Tax Bill) Passed By U.S. Congress Download File
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