Print this page

HORNE Tax Alert

HIRE Act - Hiring Incentives to Restore Employment

On March 18, 2010, the President signed into law the Hiring Incentives to Restore Employment (HIRE) Act.  The HIRE Act includes the following tax incentives:

Payroll tax holiday - exempts employers from paying their 6.2% share of Social Security taxes on wages paid during 2010 to newly-hired, qualified unemployed workers. Qualified workers are hired after February 3, 2010 and before January 1, 2011, were previously unemployed (during the 60-day period ending on the day prior to hire) and do not replace other employees. The relief applies to wages paid from March 18, 2010 and before 2011.

New credit for retained workers - provides employers with a maximum $1,000 tax credit for retaining qualified unemployed workers as described above. Workers must be employed for at least 52 consecutive weeks and wages paid during the last 26 weeks must equal at least 80% of wages paid during the first 26 weeks. This credit will first be available in 2011.

Extension of increased expensing - increases the maximum amount that can be expensed under IRC Section 179 to $250,000 for business investments in tangible personal property and increases starting point of the investment based phase-out to $800,000 for additions in years beginning in 2010.

Other recent related legislation

COBRA Premium Subsidy extension - the 2010 Temporary Extension Act extended for one month (to March 31, 2010) the 65% premium subsidy to employers to cover the costs of former employees electing COBRA coverage. A further extension of the subsidy for the remainder of 2010 is part of pending tax legislation.

HORNE's tax team is ready to assist you with the provisions of the HIRE Act. For more information, please contact your HORNE advisor.