Hire the unemployed and get a tax credit
New law provides up to $7,621.60 in incentives for each unemployed person hired.
Congress wants you to get a job, and has provided new tax incentives to put you to work.
Maybe you blinked and missed the new tax law – and I’m not talking about the Health Care Bill.
Last week, President Obama signed the Hiring Incentives to Restore Employment (HIRE) Act.
HIRE exempts wages from the employer half of Social Security taxes due for workers hired after Feb. 3, 2010, and before 2011. Procedurally, it’s done by providing a credit of 6.2% of wages, up to $106,800 per employee. That’s the maximum that’s subject to Social Security this year.
The tax savings to the employer?
As much as $6,621.60 per employee.
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To qualify, each employer must get a statement from each eligible new employee that the worker was unemployed during the 60 days before starting the new job. If the worker worked fewer that 40 total hours during that 60-day period, that qualifies as being unemployed for the credit.
So, if you worked less than 40 hours, you didn’t work. The wonder of our Tax Code --and people still don’t understand why they can’t do their own tax returns.
Sorry, family members and household employees don’t count.
Employers claim the credit on the federal employment tax return they file, Form 941. The credit will be available starting with the form for the second quarter of 2010.
The reduced payment will not affect future Social Security benefits and employees still pay their own 6.2% share.
But, that’s not all -- the incentives continue.
HIRE also creates an additional $1,000 credit for every new employee retained for 52 weeks.
That makes a potential total of $7,621.60 per employee saved in taxes. That’s free additional cash to pay your salary. Now, get out there and get a job.
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