Two New Hiring Incentives For Employers
Under the Hiring Incentives to Restore Employment (HIRE) Act, two new tax incentives have recently come into effect to help businesses hire new employees. The first incentive is the payroll tax exemption. Employers will not have to pay their 6.2% share of social security tax on wages paid to qualifyied employees from March 19, 2010 to December 31, 2010. A qualified employee is an individual hired after February 3, 2010 and before January 1, 2011 who was unemployed or employed for 40 hours or less during the 60 day period prior to their hire. The employee generally will not qualify for the credit if they are replacing another employee that was terminated without cause or if they are related to the employer.
The second incentive is a credit called the New Hire Retention Credit. A credit of up to $1,000 can be earned for hiring and retaining new employees. To qualify, the employee must be hired after February 3, 2010 and before January 1, 2011 and be retained for 1 year. The credit is calculated as 6.2% of the wages paid to the qualified employee, up to the maximum credit of $1,000 per qualified employee.
To learn more, please visit the IRS website or contact LMGW.
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