Hiring Incentives to Restore Employment (HIRE) Act (H.R. 2847

Today,  President Obama will be signing the HIRE Act – Hiring Incentives to Restore Employment (HIRE) Act (H.R. 2847).

We’ve been waiting for this all month, since the Senate passed their version of the Bill in early March.

What’s in it for you?

Good News!

It’s going to be easier to get a job according to Mark Luscombe, JD, LLM, CPA, CCH Principal Federal Tax Analyst.

(to discuss – visit Tax Quips Forum.)

CCH summarizes benefits to employers in the Act as follows:

Hiring and retention tax incentives in the bill provide forgiveness of Social Security tax for each new “qualified” employee who is hired after February 3, 2010 and before January 1, 2011. The forgiveness would apply to pay periods beginning on or after the date of enactment through the end of 2010. Businesses would also receive a $1,000 tax credit for qualified employees who then remain employed for one year. A “qualified” employee is basically someone who has been unemployed for at least 60 days prior to being hired.

This means the employer will not have to 6.2% of the new employee’s wages as of Feb 3rd. So if you’ve already made your payroll tax deposits, don’t reduce your deposits for the rest of this month. It  will appear on your quarterly Form 941 in July, the second quarter.

Employees will still have their  half of the Social Security withholding (6.2%) coming out of their paychecks. But…they will have a job.

The HIRE Act extends enhanced Code Sec. 179 expensing, at the $250,000/$800,000 threshold levels, through December 31, 2010.

More to come in this week’s MarketWatch.com TaxWatch column.

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