On March 18, 2010, the Hiring Incentives to Restore Employment (HIRE) Act became law. The centerpiece of the HIRE Act is $13 billion in tax breaks for organizations to boost hiring of unemployed workers in 2010. The “Hire Now Tax Cut” combines payroll forgiveness for Social Security taxes paid on qualified new hires, along with a tax credit for them remaining on the payroll for at least 52 weeks.

Social Security Tax Exemption
The 6.2-percent employer Social Security tax exemption applies to previously unemployed individuals hired after February 3, 2010 who have worked less than 40 hours during the 60-day period prior to employment and whose 2010 earned wages after March 18, 2010 and before January 1, 2011 do not exceed $106,800.

Tax Credit
Employers will receive an income tax credit, which is either $1,000 for each qualifying worker hired after February 3, 2010 and employed for at least 52 consecutive weeks, or 6.2 percent of wages paid to the qualifying worker over the 52-week period, whichever is less. Wages during the last 26 weeks must be at least 80 percent of wages paid for the first 26 weeks.

For more information about the HIRE Act, contact the Member Answer Center at 877-819-8284 or visit irs.gov for continually updated information or forms. iBi