2010 Hiring Incentives to Restore Employment Act

On March 18th President Obama signed the Jobs Bill into law.  The Hiring Incentives to Restore Employment (HIRE) Act is hoped to boost hiring by offering an employer exemption from Social Security payroll tax on wages paid to qualified employees that work from March 19, 2010 through December 31, 2010.

The maximum value of this credit is 6.2% of wages up to $106,800.  An additional business tax credit up to $1,000.00 can be earned if the qualified employee is retained for 52 consecutive weeks.  This credit will be taken on the employer’s 2011 income tax return.

Newly hired employees will be required to sign an affidavit certifying they meet the following qualifications:

  • Have a hire date after February 3, 2010, and before January 1, 2011
  • Have worked less than 40 hours during the 60 days prior to their hire date
  • Are not a relative of the business owner
  • Do not directly or indirectly own 50% or more of the business

Qualified businesses will need to confirm that the position being filled meets the following qualifications:

  • Is a newly created position
  • OR an existing position in which the employee being replaced left voluntarily or was terminated with cause.

The IRS has developed a form to be used in identifying qualified employees.  Oasis has developed a customized form that will allow for appropriate documentation and will be provided to our PEO clients.

The following types of employers are qualified for the program:

  • Businesses
  • Agricultural employers
  • Tax-exempt organizations
  • Public colleges and universities

Home based businesses are not eligible for the tax exemption or credit.

Also, please note that businesses will not be allowed to receive Work Opportunity Tax Credit (WOTC) benefits on any wages paid to qualified employees during the one-year period starting from the employee’s hire date.  Companies will be given the choice to opt-out of the Social Security tax exemption if they wish to participate in the WOTC program.

2010 Hiring Incentives to Restore Employment Act : Tax Credits up to 6.2% of Wages

State Level Hiring and Investment Incentives
In addition to the HIRE Act there are thousands of state programs that offer tax credits and incentives.  There are many reasons why a state would offer such programs but mainly to attract new businesses or keep existing jobs in a certain area.  Some of the programs that currently exist include State Enterprise Zones, State Hiring Credits, Job Tax Credits, Job Training Credits, Research & Development, Investment Credits, and Manufacturing Credits.

Each state has the ability to write their own rules and regulations for these tax credit and incentive programs.  This can make it very difficult to recognize areas of opportunity.  The Oasis Tax Advantage Program can easily identify which programs your business is eligible for and help you obtain those tax credits and incentives.

To find out how much your organization could be saving each year with tax credits and incentives, contact the Oasis Tax Advantage Department at 866-358-5509 or email us at taxadvantage@oasisadvantage.com

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