HIRE program - employers finally get a break!

Employer alert - you may now qualify for some relief in bringing on new employees,
particularly those who have been unemployed or working less than full time for economic reasons. The tests to meet the requirement are stiff, but worth taking a look at (especially for unemployed veterans).

The Hiring Incentives to Restore Employment (HIRE) Act contains more than $17 billion in tax credits aimed to stimulate employment, and includes $20 billion for highway and transit infrastructure programs. One of the most important provisions for businesses is a tax credit for hiring from the ranks of the unemployed.

Under the HIRE Act, the employer of a “qualified employee” is excused from paying the employer match for the 6.2 percent Social Security portion of that employee’s wages in 2010. A qualifying employee is one who is hired after Feb. 3, 2010, and before Jan. 1, 2011; is not hired to replace another employee; is not related to the employer; and certifies under penalty of perjury that he or she has not been employed for more than 40 hours during the 60-day period ending on the date that employment begins with the new employer. This incentive can save the employer up to $6,621.60 for each qualified employee hired (6.2% of the maximum Social Security withholding for 2010), with increased savings for hiring qualified veterans, whose maximum Social Security withholding amount is higher.

Employers also can receive a tax credit on their 2011 return for each new employee hired and retained for 52 weeks under certain criteria; that credit is the lesser of $1,000 or 6.2 percent of the wages paid to the employee for those 52 weeks.

These tax incentives are meant to spur job creation, especially for small businesses who are undecided about whether to begin to ramp up company-building efforts in light of recent economic difficulties.
In addition, the act includes a one-year extension of expensing thresholds so that small businesses may elect to write-off up to $250,000 of certain capital expenditures (subject to a phase-out once those expenditures exceed $800,000) in 2010 in lieu of depreciating those costs over time.

For more information, email deb@broadbandhr.com to consider whether your company can take advantage of this program.