The HIRE Act
The President signed the HIRE Act into law at 11:30am March 18, 2010. The law provides several different opportunities for businesses to capitalize on incentives for hiring additional employees who meet the following criteria.
Qualified Employees MUST be:
- Hired after Feb 3, 2010 and before Jan 1, 2011
- Haven't been employed more than 40 hours within the past 60 days
Qualified Employees CANNOT be:
- Hired individual cannot replace an existing employee unless that employee was displaced due to voluntary separation or terminated with cause
- Employees who own more than 50% of the business aren't eligible
- 1099 Employees
Qualified Employers ARE:
- Any company
- Any non-profit (religious institutions)
- Public and Private Colleges and Universities
Qualified Employers are ALL employers EXCEPT:
- United States Government (or any subdivision)
- State Government (or any subdivision)
In its final form, the law provides the following benefits for hiring these employees:
- Base Credit - Employers are forgiven the Social Security Tax (6.2%) due on wages paid to the employee up to a maximum wage of $106,800 on wages paid between March 19 and December 31, 2010.
- Bonus Credit - employers are given a bonus credit for employees who remain employed for a year. Credit is the lesser of: $1,000 or 6.2% of the wages paid to the employee in 2010.
- The Employer's Medicare tax is NOT forgiven under the HIRE Act
The maximum benefit that can be attained under this plan is $7,622 per employee including the bonus credit.
Coordination with other Tax Credits
Employers must chose whether or not to utilize the HIRE Act or Work Opportunity Tax Credit.
Other tax credits you may qualify for include:
- Empowerment Zone Tax Credits - Up to $3,000 per employee
- Renewal Community Tax Credits - Up to $1,500 per employee
- Indian Employment Credits
- Enterprise Zone Tax Credits
- Job Creation Tax Credits
- Investment Tax Credits
- Research and Development Tax Credits
- Withholding Tax Credits
To find out how TCS can help you leverage your potential tax credits, contact us today for a free estimate.