Incentive to Hire New Employees

From the Worldwide ERC this notice was received- On March 17, 2010, President Obama signed legislation that provides incentives for businesses to hire the unemployed. Under the “Hiring Incentives to Restore Employment Act” of 2010, employers that hire new workers after February 3, 2010 and any time during the rest of 2010 will be exempted from the employer’s 6.2% share of FICA for those workers, provided the workers were unemployed for the 60 days before starting work or worked less than full time (40 hours per week) for someone else during that period. The workers must be new workers, rather than replacements for existing workers, but new hires filling existing positions that are vacant will also qualify so long as the previous worker left voluntarily or for cause. For a worker at the maximum social security wage base of $106,800, the saving to the employer would exceed $5,000. In addition, if the new worker is retained for a full year, the employer will receive an additional $1,000 general business tax credit. The IRS said it will be providing necessary forms and instructions within the next few weeks, but that in the meantime employers should obtain from each new employee a statement indicating that the new employee meets the requirements outlined above.