Federal New Hire Act
January 4, 2011
The HIRE Act offers qualified employers a temporary payroll tax break (Payroll Tax Exemption) for hiring qualified previously unemployed workers. It also includes an increased business tax credit for retaining qualified workers for at least 52 weeks. The benefits can be substantial: up to $6,621 in payroll tax credits and up to $1,000 in business tax credits per eligible employee.
If an employer applies the payroll tax exemption to wages paid to a qualified employee, such wages paid to the employee during the one-year period beginning with the employee’s hiring date may not be taken into account for purposes of the Work Opportunity Tax Credit
Employers are able to back retroactively to capture the benefit but you will need to amend federal payroll tax returns and possibly W-3/W-2 forms as part of the process.
