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PKF Texas – Entrepreneur’s Playbook®:HIRE Act

by | Dec 10, 2010 | PKF Texas - The Entrepreneur's Playbook®

Note: Running Fridays in FromGregsHead.comis a continuing series of tips brought to you by Greg Price. These run Saturday mornings during the BusinessMaker’s Radio Show on KPRC 950AM. Audio files can be found on the PKF Texas – Entrepreneur’s Playbook® page of the PKF Texas website.

The "Hiring Incentives to Restore Employment Act of 2010," or HIRE Act, enacted earlier this year, included new incentives to encourage hiring. The centerpiece of the HIRE Act is a payroll tax holiday and up-to-$1,000 tax credit for businesses that hire unemployed workers.

Under the Hire Act any private-sector employer hiring a worker who previously had been unemployed for at least 60 days is exempt from having to pay the employer’s 6.2% share of the Social Security payroll tax on that employee for the remainder of 2010.  Employment must begin after February 3, 2010, and before January 1, 2011.

Even though the window for the employment tax holiday is starting to close, there are still opportunities to benefit from this provision in 2010; especially if you are budgeting an increase in staffing for the first quarter of 2011.The payroll tax benefit of the new incentive is immediate.

There is no minimum weekly number of hours that the new employee must work for the employer to be eligible, and there is no limit on the amount of payroll taxes exempted under the provision.

Please note, these provisions do not apply to the hiring of family members or the replacement of existing employees.  Refund opportunities may exist if previously eligible hires were overlooked.

Be sure to speak to your accounting service provider about these timely tax provisions.  Tax updates from PKF Texas may be found at www.pkftexas.com/taxnews.
 

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