2010 Hire Act – Tax Break for Small Business
President Obama signed the Hiring Incentives to Restore Employment (HIRE) Act on March 18, 2010. This new $17.5 billion legislation (scaled down from an earlier $150 billion package) is of particular interest to businesses as it includes new tax benefits directly related to hiring employees and writing off investments in equipment.
The new tax incentives for businesses to hire unemployed workers:
- payroll tax exemption of the employers share of Social Security taxes on wages paid to these workers after March 18, 2010.
- employer tax credit of up to $1,000 per worker
The new employees must meet these criteria in order to qualify for the business tax credits.
- hired between Feb 3, 2010 & Jan 1, 2011
- newly-hired employee was unemployed during the 60 days prior to starting work, or worked fewer than 40 hours for someone else during the 60 day period
Household employers are not eligible for the new tax benefits.
The HIRE Act is aimed at providing hiring incentives to restore some of the jobs lost in the latest economic recession. The goal is to help put Americans back to work as soon as possible. Business owners that hire qualifying workers sooner rather than later will get the most out of the tax credits, as the tax credits diminish over time, disappearing completely by January 1, 2011.
Another item of interest in this federal jobs bill is to permit small business owners to write off equipment investments of up to $250,000 this year, instead of taking years to depreciate. This in a doubling of the previous amount of $125,000. This will provide tax incentives for small businesses to grow while stimulating the economy with their investment spend.
President Obama’s job creation bill also includes provisions for putting people to work by reforming municipal bonds. Build America Bonds will allow the money to be spent on construction & repair of public projects like schools, highway and transit programs, as well as green and clean energy conservation projects like wind turbines and solar energy devices. Some of this money comes from moving $20 billion into the highway trust fund.
All politics aside, we will let the Americans going back to work decide how well the HIRE Act actually accomplishes its goals of a national recovery and job growth.
More details of the HIRE Act, including tax incentives like the payroll tax holiday can be found here.
A transcript of President Barack Obama’s signing of the HIRE Act at the White House can be found here.
The complete text of H.R. 2847 “Hiring Incentives to Restore Employment Act” can be found here.
Leave a Reply
- The Great Debate – QuickBooks Desktop vs. QuickBooks Online
- Using Account Numbers in Your QuickBooks Chart of Accounts
- QuickBooks Creating a More Meaningful Payroll Expenses Section
- Calculating & Displaying Fringe Benefits on a Certified Payroll Report
- QuickBooks Payroll Tip - Tracking Employee Advances or Loans
- How To Turn On and Use Manual Payroll in QuickBooks
- Create a QuickBooks Job Cost Report With Hours & Payroll Costs
- QuickBooks Tip - Job Costing Starts With A Simple Item
- QuickBooks Tip - Child Support Garnishments
- QuickBooks for Contractors Tip – Basics of Progress Invoicing
- Welcome to the QuickBooks for contractors blog
- QuickBooks Tip-Creating a Functional Payroll Liabilities Section
- QuickBooks Tip-Handling Employee Reimbursements for Expenses
- QuickBooks Tip: Important Facts About Items Left as Billable
- QuickBooks Tip - Determing Cost of Goods Sold
- Straight from the IRS - Social Security Tax Reduced to 4.2%
- QuickBooks 2013 Upgrade Do's, Don'ts & Frequent Questions
- QuickBooks 2012 - Frequently Asked Questions About Upgrading
- QuickBooks 2015- The Good, Bad and Ugly, Part 1
- QuickBooks 2015 Announced - Important System Requirements