Financial Incentives

Hiring Incentives to Restore Employment (HIRE) Act 

The HIRE Act allows businesses that hire new employees prior to January 1, 2011, to withhold payment of the employer's share of the Social Security tax (6.2% of wages). This reduced tax withholding will have no effect on the employee's future Social Security benefits. Additionally, businesses that retain a newly hired employee for at least 52 consecutive weeks can qualify for a tax credit of up to $1,000. Both tax breaks are available for new hires who have been unemployed for at least 60 days immediately prior to beginning their new job.

A qualified new hire is defined as follows:

• Employee hired between Feb 3, 2010 and Dec 31, 2010
• Employee previously unemployed or employed less than 40 hours within the prior 60 days
  • Employees must sign an affidavit under the penalties and perjury law
  • Employee can't be related to the employer

 To qualify for additional credit, Employers must ensure the following:

• Employee must be retained for 52 weeks
• Employee must earn at least 80% of the amount of wages they earned in the first 26 weeks of the 52 week period during the last 28 weeks of the 52 weeks retention period

The HIRE Act tax credit can be taken on the employer's 2011 Income Tax Return. An affidavit model form will be retained by employers and not submitted to the IRS. Employers are able to opt out of the exemption and elect to pay the tax. Learn more at HR 2847.