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Hiring Incentive to Restore Employment (HIRE) Act March 25, 2010

Posted by solutionsinsuranceservices in Human Resources.
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The HIRE Act was signed into law on March 18th. This law is intended to stimulate new job creation by offering a Section 101 Payroll Tax Exemption to employers.

Between March 19, 2010 and December 31, 2010, all wages for a qualified employee will be exempt from the 6.2% Employer share of Social Security tax. A qualified employee is defined as 1) An employee hired between Feb 3, 2010 and Dec 31, 2010. 2) An employee who prior to beginning employment was previously unemployed or employed less than 40 hours in the prior 60 days and 3) Can’t be related to the employer. The IRS is allowing employers to reduce deposits by the amount of the exemption starting in 2nd Qtr.

An employer can elect out of the exemption and elect to pay the tax. Employees must sign an affidavit under the penalties and perjury law. A sample affidavit form will be available on the IRS WEB site for employers to use – it will be retained by employers and not submitted to the IRS.

If a qualified employee is retained for 52 weeks then the company is eligible for an additional tax credit. This is designed to promote retention of the hired employees. To qualify for the additional credit the company must not only retain the employee for 52 weeks but also, in the last 26 weeks of the 52 week retention period, the employee must earn at least 80% of the amount of wages they earned in the first 26 weeks of the 52 week period. The additional credit is the Employer portion of the Social Security tax paid on the qualified employee’s wages with a max of $1000.00. The credit can be taken on the employer’s 2011 Income Tax Return



1. solutionsinsuranceservices - April 1, 2010

Additional Information is now available as is the sample form. If you would like more information, drop me at email at ghardy@solutionsinsuranceservices.com. I’ll send you the form and the links to the information.

2. solutionsinsuranceservices - April 8, 2010

The IRS has released the final form if you need a copy, please email me at ghardy@solutionsinsuranceservices.com and I will send it to you.

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