On March 18, 2010, President Obama signed the Hiring Incentive to Restore Employment Act (HIRE Act) which, among other things, offers a payroll tax break for businesses that hire unemployed workers. The worker must be hired into a new position, or into a position vacated by an employee who voluntarily resigned or was terminated for cause. The newly hired employee must certify by affidavit, signed under penalty of perjury, that he or she has not been employed for more than 40 hours during the 60 day period ending on the date employment begins.

Employers will be granted an exemption from their 6.2% Social Security (FICA) tax liability for any qualifying new employee hired after February 3, 2010; this FICA tax exemption applies to wages starting on March 19, 2010 through December 31, 2010.

The HIRE Act also provides a tax credit for newly hired employees employed for a minimum of 52 weeks. To qualify, wages paid in the second half of the 52 weeks must equal at least 80% of those paid in the first 26 weeks. The credit is $1,000 or 6.2% of taxable wages, whichever is less. The maximum $1,000 credit applies for wages paid in excess of $16,129.03. Employers may not claim a Work Opportunity Tax Credit (WOTC) for an employee whom they are eligible to claim the HIRE Act credit, unless the employer elects not to apply the HIRE Act credit.

If you have any questions about the HIRE Act, please contact CPEhr and an HR Outsourcing specialist will be happy to assist you.

Source: www.EPLIpro.com