HIREing Incentives
For Small Businesses, hiring new employees is a big financial leap. The good news is, there’s a temporary relief for business who are contemplating new hires.
A new Act was signed March 18th, 2010; Hiring Incentives to Restore Employment (HIRE) which combines payroll forgiveness for Social Security taxes paid by employers on qualified new hires with a tax credit for keeping new hires on the payroll for at least 52 consecutive weeks.
What this means, the HIRE Act provides employers with an exemption from Social Security payroll taxes for every worker hired after Feb 3rd 2010, and before Jan 1st 2011, who have been unemployed for at least 60 days. Considering the benefits to the employer are tied to the 6.2% of any salary paid, a qualified worker may be hired for any number of hours, part time or full time.
In order to claim these benefits, the Employer will have to fill out a Form 941 revised, and begin on the second quarter filing. In addition, a Form W-11 will have to filled out by the employee for proof of his working terms within the time. These forms are not filed with the IRS, but retained with other income and payroll tax records. Make sure you hold onto them in case of an audit.
In addition, HIRE gives $1,000 income tax credit for every new employee retained for over 52 weeks. Granted, the employer will have to wait till 2011 tax returns are filed to benefit since it is a consecutive 52 weeks prerequisite.
Included within the HIRE Act, a bipartisan Senate Vote extended the Section 179 deductions of 2008 & 2009 expense thresholds so that small businesses can continue to write off ‘Eligible Property‘ of up to $250,000 with a phase-out of $800,000 till Dec 31st of this year 2010. So if you haven’t already gone Christmas shopping for your company, now’s the time.
If you have any further questions, you can follow the IRS likes listed:
