HIRE Act
2010 HIRE Act Savings Calculator
The 2010 HIRE Act provides qualified businesses a Social Security tax credit and a business tax credit for hiring qualified workers. Find out how much your business can save as a result of the HIRE Act tax credits.
This calculator is designed to give businesses an estimate of their HIRE Act tax savings. Please consult with your tax professional for specific information regarding the HIRE Act and your business.
The 2010 Federal HIRE Act: What you need to know
The Hiring Incentives to Restore Employment (HIRE) Act was signed into law by President Obama on March 18, 2010. This act has two main provisions that impact employers.
Social Security Tax Exemption
The social security tax exemption applies to employees hired after February 3, 2010, who were previously unemployed for at least 60 days prior to being hired, or who worked less than a total of 40 hours in the 60 day period prior to beginning work for the new employer. Employers will save the 6.2% employer social security tax, up to the wage base limit, on wages paid to these employees after March 18, 2010, and before January 1, 2011. Household employees and family members are not considered eligible employees.
Eligible employers are businesses, agricultural employers, tax-exempt organizations, public colleges & universities.
Eligible employees will be required to certify by “signed affidavit” under penalties of perjury that they have not been employed for more than 40 hours during the 60 day period prior to their hire date. Employers are required to retain these statements for a currently undefined period of time. The IRS has provided Form W-11, Hiring Incentives to Restore Employment (HIRE) Act Employee Affidavit, for use as the signed affidavit.
Eligible positions are newly created positions or positions being filled because the worker left voluntarily or for cause (termination for a reason – inclusive of workforce reduction, “for cause” does not include termination to hire a family member).
The first quarter tax credit will be reported on the second quarter Form 941, which is currently being redesigned by the IRS.
Tax Credit
Employers that retain these eligible employees for 52 consecutive weeks after they are hired may be eligible to claim an additional tax credit up to $1,000 for each retained employee on their income tax return.
CompuPay is committed to providing the most accurate and up-to-date payroll and tax filing services. We have enhanced our payroll applications to accommodate this new legislation, and instructions on how to report eligible employees will be provided in the near future.
The IRS will be posting forms, FAQs, and more information on their website regarding the new tax provisions during the next few weeks. The IRS notification can be accessed by clicking the following link: 2010 HIRE Act Information.
IRS Q&A for Employers
The IRS has developed a question and answer Web page designed to address employer questions regarding the HIRE Act. 2010 HIRE Act Q&A for Employers.