Tuesday, June 8, 2010

HIRE Act Provide Employer Tax Benefit for New Hires

President Obama signed the Hiring Incentives to Restore Employment (HIRE) Act of 2010 into law in March of 2010, estimating the creation of 250,000 new jobs. Under the HIRE ACT, private businesses, agricultural employers, tax-exempt organizations and public colleges and universities all qualify to claim the payroll tax benefit for eligible newly-hired employees. In a nutshell:

  • Employers who hire unemployed workers after Feb. 3, 2010 and before Jan. 1, 2011 may qualify for a 6.2-percent payroll tax incentive. This effectively exempts these employers from their share of Social Security taxes on wages paid to these workers after the date the bill was enacted.
  • For each worker retained for at least a year, businesses may claim an additional general business tax credit, up to $1,000 per worker, when they file their 2011 income tax returns.
The HIRE act is about providing new employment for unemployed Americans. Therefore it requires that each eligible new hire be unemployed during the 60 days before beginning work or, have worked fewer than a total of 40 hours for someone else during the 60-day period.

There are two primary ways sites might think about the benefits of this act. First, non-profits who hire between February 2, 2010 and January 1, 2011 are eligible for the benefits of the HIRE Act. Second, sites who have an active workforce pipeline may work to ensure that participating employers are aware of the HIRE Act and its benefits as a way to encourage hiring.

Click here for more information about the HIRE Act.

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