The new Hiring Incentives to Restore Employment Act (HIRE) Act of 2010 provides a couple of key payroll tax breaks for employers that hire new employees.
Strategy: Zero in on certain unemployed workers. If your company hires a “qualified employee,” the business is exempt from the employer’s 6.2% Social Security tax portion of the FICA tax on the employee’s wages for the rest of 2010. Plus, the company is entitled to a new tax credit if it keeps the worker employed for at least 52 consecutive weeks.
These new breaks apply to qualified employees who begin working for your company after Feb. 3, 2010, and before Jan. 1, 2011.
Tax break No. 1: Skip a payroll tax liability
Normally, an employer must pay the 6.2% Social Security tax portion of the FICA tax on an employee’s wages up to a specified annual amount ($106,800 for 2010). The employer’s 1.45% Medicare tax portion of the FICA tax applies to all wages.
But the new law waives...(register to read more)