Tax credit gone, but not forgotten

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in Small Business Tax,Small Business Tax Deduction Strategies

Q. We’ve received conflicting information from accoun­­tants. Is our company entitled to a tax credit for hiring new workers? J.M.V., Memphis, Tenn.

A. Not right now. Under the Hiring Incentives to Restore Employment Act of 2010 (HIRE), a business can claim a tax credit of the lesser of $1,000 or 6.2% of the wages paid to a qualified worker during a consecutive 52-week period. The HIRE Act also included a payroll tax exemption for employers.

But these tax breaks only apply to previously unemployed workers who were hired after Feb. 3, 2010, and before Jan. 1, 2011. Although Congress has debated an extension of the HIRE credit, it has not occurred.   

Tip: Alternatively, an employer may qualify for a Work Opportunity Tax Credit (WOTC) for hiring qualified workers from certain disadvantaged groups.

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