Obama’s new HIRE Act and how it affects you
Small businesses are getting tax breaks for hiring employees
We recently published an article about Health care reform and heard from many of you that factual information about new laws and policies was helpful…so we will continue to update you on laws and policies that may affect how you do business.
A few weeks ago President Obama signed into law a $17.5 billion bill, called the Hire Act. It’s stated intent is to help stimulate job creation for small businesses. Ok, $17.5 billion sounds awesome, I could buy 35 million iPads with that, but what does it all mean for you? Here’s what you need to know:
Reduced Social Security Taxes: Employers will not have to pay the Social Security tax for hiring someone who has not had full-time work for the past 60 days. This means you can save up to 6.2% of wages up to $106,800, a maximum value of $6,621 per employee.
Business Tax Credit: If you keep the employee for at least a year, you will also be eligible for a $1,000 business tax credit (the employee’s salary in the last 26 weeks must be at least 80% salary of the first 26 weeks).
Which employees apply? The employee:
- must be hired between Feb 3rd, 2010 and Jan 1, 2011
- was previously unemployed for the past 60 days
- is not a relative
- cannot be fired then rehired
What are your thoughts on the new bill? Will it actually make you consider hiring someone? If so, what do you plan on spending your tax savings on?
On a side note, Intuit’s most recent Small Business Employment Index reports that 50,000 new jobs were created in March alone, and 175,000 new jobs since June 2009. As we all know, you are the heart of the economy, so thank you for keeping us afloat!
To learn more, checkout these helpful resources:
Best Wishes,
Brian Tran
(About me: I’m a software engineer on QuickBooks Online. He hopes to one day own a restaurant called Bubbo’s, serving different kinds of comfort food from around the world.)
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