Two New Tax Benefits for Employers

Aimed at providing hiring incentives to restore some of the jobs lost in the latest economic recession, and to help put Americans back to work as soon as possible, the IRS recently updated language in the HIRE (Hiring Incentives to Restore Employment) Act, which offers employment tax incentives to businesses, established in March 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 business equipment.

Employers who hire unemployed workers this year (after Feb. 3rd, 2010 and before Jan. 1, 2011) may qualify for a 6.2 percent payroll tax incentive. The tax incentive is equal to the employers’ share of Social Security tax on wages earned after March 18, 2010

In addition, for each worker retained for at least a year, businesses may claim an additional general business tax credit, up to $1,000 per worker, when they file their 2011 income tax.

Eligible Employees 

  • Must be hired between Feb 3, 2010 and January 1, 2011
  • Must have NOT been employed for more than 40 hours in the 60 days prior to their hire date.

 Procedure to Receive the Credit

  • The employee must complete and sign a form W-11 (click on W-11 to download form). The employee attests that they have met the criteria for the credit.
  • The employer claims the credit when they file their quarterly payroll tax form, Form 941 (click on Form 941 to download). The credit is on line 6c and 6d.

As of July an estimated 4.5 million workers, who have been unemployed for an average of 10 months, have been hired as a result of the HIRE Act, according to a recent New York Daily News post. With many employers on the fence regarding when and if it’s the right time to bring on new staff, the HIRE Act is a welcome incentive to make the decision in favor of adding new employees. In the first four months since the Act was enacted, the Treasury Department reports that businesses have saved more than $8 billion.

Source:  IRS.GOV






Chris Carlson, CPC, Aureus Group Regional Manager
Chris Carlson, CPC, Aureus Group Regional Manager

About Chris Carlson

In addition, Chris is a Certified Professional Consultant, and has a Bachelor of Science in Business Administration and a Master’s of Business Administration from the University of Nebraska at Omaha.

Chris is an experienced executive in the staffing industry. She has extensive experience in developing and implementing operational analyses and programs and has assisted hundreds of firms streamline processes and upgrade the competencies of its workforce. Finding innovative ways to generate new business and build teams is her passion. She has developed and executed many successful strategic marketing plans. Chris began her career at Aureus Group, a full-service professional recruiting firm, in 1994 and currently serves as the regional manager of Aureus Group specializing in the Finance & Accounting, Systems and Executive search areas.



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