On March 18, 2010, President Obama signed the Hiring Incentives to Restore Employment (HIRE) Act (H.R. 2847). The law expands critical transportation and infrastructure programs in order to create jobs. However, most employers need to know that the new law provides roughly $13 billion in tax incentives to employers for hiring new employees in 2010.
According to a news release summary from the Senate Finance Committee, the law includes an exemption from Social Security payroll taxes which employers owe for every worker hired after February 3, 2010, and before January 1, 2011, who have been unemployed for at least 60 days. The maximum value of the credit would be equal to 6.2 percent of wages up to $106,800, the FICA wage cap. There is an additional $1,000 income tax credit for every new employee retained for 52 weeks, to be taken on the employer’s 2011 income tax return.