Wyatt Employment Law Report

The HIRE Act: Tax Incentives for Hiring the Unemployed

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By Debra Dawahare

The HIRE (Hiring Incentives to Restore Employment) Act, signed into law on March 10, 2010, gives a tax break to businesses that hire unemployed workers before January 1, 2011.

To qualify the employer for the benefit, the new employee must sign an affidavit saying that he or she was employed for 40 hours or less during the 60 days before the new employment began,  and  the hiring must occur after February 3, 2010  but before January 1, 2011.  The new employee must not replace another employee, unless that employee voluntarily quit or was dismissed for cause. 

While the employer will still have to withhold Social Security taxes for the new employee, HIRE provides that the employer will get a tax credit for it, beginning in the second quarter of 2010.  Previous rules regarding the employer’s share paid for Medicare taxes will still apply. 

If the business retains the new employee for 52 weeks, it will receive a one-time tax credit for such retention. 

Employers should check with their CPAs or tax attorneys regarding  HIRE’s potential benefits for them.

Author: Kim Koratsky

Labor & employment lawyer with the Memphis, Tennessee office of Wyatt, Tarrant & Combs, LLP

Leave a reply. Please note that although this blog may be helpful in informing clients and others who have an interest in information privacy and security, it is not intended to be legal advice. The information on this blog also should not be relied upon to form an attorney-client relationship.

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