HIRE Act signed into law
The “Hiring Incentives to Restore Employment Act” (HIRE Act), signed into law on March 18, 2010, creates two new business-friendly tax breaks that can save you money on your 2010 federal income tax return. The HIRE Act also extends a 2009 break.
Here’s an overview.
* Payroll tax forgiveness. The Act provides an exemption for your share of the social security payroll tax when you hire certain qualified workers after February 3, 2010 and before January 1, 2011.
The break means you can forego paying the 6.2% matching portion of social security taxes on qualifying wages.
Your new employees must certify that they haven’t worked more than 40 hours during the 60-day period before starting work for you.
* Retained worker credit. When workers who qualify for payroll tax forgiveness stay on the job 52 weeks, you may be able to claim a credit on your business’s federal income tax return. Credits are applied against the tax you owe. The maximum credit is $1,000 per retained worker.
* Section 179 extension. The enhanced Section 179 expensing rules are extended through the end of 2010. You can expense up to $250,000 of machinery and equipment you purchase and use in your business, as long as the total cost of the assets you buy does not exceed $800,000.
The HIRE Act contains other tax provisions that may affect your business. Please call for the latest update.