New bill signed into law for SBO’s looking to hire new employees.
The Hiring Incentives to Restore Employment Act (HIRE), also known as the "jobs bill," signed by the President on March 18, 2010, is a plan to create jobs by providing a temporary tax break to small businesses that hire the unemployed.
How is it planned to help SBO’s (2 Ways)
Payroll tax exemption– SBO’s that pay wages after March 18, 2010, and before January 1, 2011, to qualified individuals are exempt from the (i.e., the Social Security portion) of the FICA employment tax for those qualified unemployed workers they hire.
Watch Your 1st and 2nd Qtr. Payroll Tax Forms (Form 941)
For wages paid prior to April 1, 2010 (1st Qtr.), the exemption comes in the form of a second quarter credit. That is, wages paid prior to April 1 that would otherwise qualify for the exemption are subject to regular payroll tax rules. However, the amount by which an employer’s payroll tax would have been reduced under this provision will be treated as a payment against tax in the second quarter of 2010.
Business Tax Credit
Tax credit for retaining new hires– For tax years ending after March 18, 2010, a business tax credit equal to the lesser of $1,000 or 6.2% of wages paid to the worker during the 52 consecutive weeks of employment, and is allowed for each employee in the taxable year in which the 52 consecutive week period is first satisfied will be allowed for each qualified individual.
The Tech Accountant