Tax Credits for Small Business Hiring
The HIRE Act of 2010
President Obama signed the Hiring Incentives to Restore Employment (HIRE) Act on March 18, 2010. This $17.5 billion legislation is of particular interest to businesses as it included new tax benefits directly related to hiring employees and writing off investments in equipment.
The new tax incentives for businesses to hire unemployed workers included:
- A payroll tax exemption of the employer’s share of Social Security taxes (6.2 percent) on wages paid to those workers after March 18, 2010.
- An employer tax credit of up to $1,000 for each new worker who stays on the job for one year.
The new employees must meet these criteria in order to qualify for the business tax credits:
- Hired between February 3, 2010 and January 1, 2011.
- The newly-hired employee was unemployed during the 60 days prior to starting work, or worked fewer than 40 hours for someone else during the 60 day period.