Tax Bite on Businesses
We are all looking for ways to lower the tax bite on our business’s. The government has given us a few incentives this past year, to help spur employment. While you’re probably not looking to help the masses become employed, one “little thing” you might want to take advantage of is the “HIRE Act”. Under the “Hiring Incentives to Restore Employment (HIRE) Act”, enacted March 18, 2010, two new tax benefits are available to employers who hire certain previously unemployed workers who are considered, “qualified employees.”
The first, referred to as the payroll tax exemption, provides employers with an exemption from the employer’s 6.2 percent share of social security tax on wages paid to qualifying employees, effective for wages paid from March 19, 2010 through December 31, 2010.
In addition, for each qualified employee retained for at least 52 consecutive weeks, businesses will also be eligible for a general business tax credit, referred to as the new hire retention credit, of 6.2 percent of wages paid to the qualified employee over the 52-week period, up to a maximum credit of $1,000.00.
So – basically if you hired a person that was on employment for 60 days and didn’t work for more than 40 hours during that time they may be considered a qualified employee.