The Senate approved H.R. 2847 last Wednesday, February 24.
Included in the $15 billion Senate HIRE job-creation bill “Hiring Incentives to Restore Employment Act” are tax breaks that would give businesses incentives to hire unemployed workers. The legislation amended a much larger jobs bill passed last December by the House.
Payroll Tax Relief for Hiring Unemployed Workers
For certain employers, the Senate HIRE Act would provide relief of the employers 6.2% OASDI (Social Security tax liability) for wages paid to a “qualified individual” for any 2010 period starting anytime on or after the date the bill is enacted and before January 1, 2011.
- Begins work for a qualified employer after February 3, 2010 and before January 1, 2011.
- Certifies by signed affidavit, under penalties of perjury, that the individual had not been employed for more than 40 hours during the 60-day period ending on the date the employment begins.
- Individual is not employed to replace another employee of the employer unless that former employee separated from employment voluntarily or for cause.
- Is not related to the employer described in section IRC 51(i)(1) (substituting ‘qualified employer’ for ‘taxpayer’).
Employers of federal, state, and local government would not be eligible for the employer tax exemption. However, public higher education institutions would be eligible.
Business Credit for Retention of Certain Newly Hired Individuals in 2010
In general, the Senate jobs bill would increase an employer’s business credit by $1,000 on its income tax return for each ‘retained worker’.
Retained Worker
- Employed by the taxpayer on any date during the taxable year.
- Employed by the taxpayer for a period of not less than 52 consecutive weeks.
- Whose wages during the last 26 weeks of such period equaled at least 80 percent of such wages for the first 26 weeks of such period.
The bill will now be considered by the U.S. House of Representatives, as Americans continue to grow impatient for economic growth to translate into jobs.
