House passes HIRE Act : Payroll Tax Forgiveness – Payroll Tax Credit

On March 4, 2010, the House passed the Hiring Incentives to Restore Employment (HIRE) Act. This is how the new act affects payroll taxes:

The HIRE Act would provide businesses with an exemption from Social Security payroll taxes they owe for every worker hired in 2010 who has been unemployed for at least 60 days. The maximum value of this incentive is $6,621, which equals to 6.2 percent of wages paid in 2010 up to the FICA wage cap of $106,800. The longer that a business has a new qualified worker on its payroll, the greater the tax benefit. This would create an incentive for businesses to hire people now.

In addition, to promote long-term employment, there would be an additional $1,000 income tax credit for every new employee retained for 52 weeks.

Our payroll software is very flexible and allows the employee and employer to be setup as exempt from any type of tax including the Social Security payroll tax. Please visit the payroll mate page to learn more and to download a free payroll software demo.