Highlights of the Hiring Incentives to Restore Employment Act  “HIRE”     In an attempt to revitalize the economy, the Congress recently passed new legislation referred to as the “HIRE” Act.   There are two valuable incentives for employers that boost payroll this year:  a payroll tax holiday for employers that hire unemployed workers an up-to-$1,000 tax credit for keeping such new hires on the payroll for at least one year Qualified employers are exempted from paying the employer portion (6.2%) of Social Security taxes on wages paid to individuals hired after Feb 3, 2010 and before January 1, 2011. This individual must sign a new IRS Form W-11, which is an affidavit stating that the individual hasn’t been employed for more than 40 hours during the 60 day period ending on the date employment begins with the employer. The new hire doesn’t replace another employee (unless that other employee left voluntarily or for cause). The new hire is not related to the qualified employer. Relatives include children, grandchildren, siblings, step-siblings, parents, step-parents, nephews, nieces, uncles, aunts, or in-laws. However, they don’t mention a spouse. The tax credit will be part of the 2011 tax return since the credit won’t be known until the new worker remains employed for 52 weeks. The credit is the lesser of $1,000 or 6.2% of total wages paid for the 52 week period. As with any new legislation, some of the details will need to be explained further, but this should give you the highlights of the Act.  If you have any questions on this new legislation, please feel free to call our office. Back to home