HIRE Act, what you need to know!

March 18, 2010 President Obama signed into law the Hiring Incentives to Restore Employment Act (HIRE).  This is a plan to create jobs by providing a temporary tax break to companies that hire the unemployed.  So,  how does this benefit you the employer?  This will exempt you the employer from paying the employer portion of the Social Security taxes for the remainder of the year on new hires who were previously unemployed.

A qualified employee meets the following requirements:

• Begins employment after February 3, 2010, but before January 1, 2011.
• Has not been employed more than 40 hours total during the previous 60 days.  The employee must sign an affidavit attesting that this is true.
• Employee is not hired to replace an existing employee UNLESS the prior employee left voluntarily or for cause.  In other words you can not replace an employee that you laid off.
• Employee is NOT a family member of the business owner.

Employers may begin  claiming this tax credit on the second quarter 2010 Form 941.  The tax credit is for the 6.2% employer portion of the Social Security tax for wages paid to qualified employees up to the $106,800 Social Security wage base.

Be sure to contact our office at  http://www.knollcpa.com/contact.php with any questions regarding these new changes.