Have you hired someone since Feb 3, 2010 who was unemployed at the time? If so, you might be eligible for a payroll tax credit. Here are the guidelines under the Hiring Incentives to Restore Employment Act of 2010. Thanks to Deb Mosimann of the Swiss Woods Bed and Breakfast for bringing it to my attention.
Below is what’s on Wikipedia about it, and here’s a link to the official IRS page about it.
The Hiring Incentives to Restore Employment (HIRE) Act of 2010 (Pub.L. 111-147, 124 Stat. 71, enacted June 2010, 03) is a law in the 111th United States Congress to provide payroll tax breaks and incentives for businesses to hire unemployed workers. Often characterized as a “jobs bill,”[1][2][3] the Democrats in Congress insist that it is only one piece of a broader job creation legislative agenda, along with the Travel Promotion Act and other bills.
Legislative history
The Senate passed the bill on February 24, 2010 by a vote of 70-28. The House of Representatives followed on March 4, 2010, passing an amended version (in compliance with new pay-as-you-go rules) by a vote of 217-201. On March 17, the Senate agreed to the House’s amendment by a vote of 68-29, and sent the bill to President Barack Obama, who signed the bill on March 18, 2010.[4]
Provisions
Employers are eligible for a payroll tax credit when the employer hires certain new employees after February 3, 2010, and before January 1, 2011.[5] In order to take the payroll tax credit, the employee must have either been unemployed for at least 60 days prior to hire or worked fewer than 40 hours for another employer during the previous 60 days.[6] Employers do not pay the employer portion of social security tax, which is 6.2 percent, on wages paid to eligible new hires.[5] In addition, employers receive a general business income tax break if the employer continues to employ the new hire for at least 52 weeks.[5] The tax break is the lesser of $1,000 or 6.2 percent of wages paid to the new employee during the 52-week period.[5] Household employers are ineligible for both tax benefits, as are new employees who are related to the employer.[7] Also ineligible are employees who earn more than $106,000 per year and employees who displace a current employee, unless the first employee resigned or was terminated for cause.[8] Employers may claim the credit after an eligible employee signs a statement affirming their previous unemployed status, such as Form W-11.[9][10]
The Act also extends the $250,000 deduction limit under section 179 through 2010,[11] authorizes $20 billion for highway and transit projects,[12] and makes reforms to municipal bonds.[1]
To offset the costs of the Act, there will be a 30-percent withholding tax on income from U.S. financial assets held by foreign banks who have not agreed to disclose their American account holders’ balances, receipts, and withdrawals.[2] Owners of these foreign-held assets on their tax returns if they are worth more than $50,000.[2] Individuals who do not disclose these assets will be subject to a 40-percent penalty.[2] The Act also closes a tax loophole that investors had used to avoid paying any taxes on dividends by converting them into dividend equivalents.[13]
