Maximize Business Benefits of the HIRE Act
Your business may be eligible for a $1,000 tax credit for each newly hired worker who you retained for at least one year. This credit opportunity is a result of the Hiring Incentives to Restore Employment (HIRE) Act, enacted March 18, 2010. The HIRE Act tax credit was intended to encourage companies to hire and retain new workers who were previously unemployed.
The credit is claimed on your 2011 business tax return, and amounts to the lesser of $1,000 or 6.2% of qualified wages for every qualified employee. The fine details of the credit may appear complicated, but Berntson Porter can help you take advantage of this opportunity.
The qualifications for the credit are as follows:
- Qualified employees are those that were previously unemployed. Specifically, they had not worked more than 40 hours total during the 60 day period before being hired.
- They were hired between February 4, 2010 and December 31, 2010.
- They retained employment for a consecutive 52 week period.
- Their wages during their last 26 weeks must equal at least 80% of wages for the first 26 weeks.
- Family members related to any business owners do not qualify.
- They were not employed to replace another employee unless the other employee separated from employment voluntarily or for cause.
The employer must keep a record of form W-11, including social security number for each qualified employee.
For related questions please contact Jake Sutherland, CPA, MPAcc (Tax) at 425-289-7665 or email@example.com.