Can the HIRE Act Benefit Your Practice?
With all the hoopla surrounding passage of health care reform, you may have overlooked the Hiring Incentives to Restore Employment (HIRE) Act. In addition to providing tax relief for hiring unemployed workers, the new law encourages investment in equipment by revising the 2010 expensing limit under Section 179 of the tax code.
The HIRE Act:
- Exempts employers from their share of Social Security taxes on wages paid to qualifying employees after March 18, 2010, through the end of 2010.
- Offers employers a tax credit of up to $1,000 (or 6.2% of wages paid, if less) for each newly hired employee who is retained for at least 52 consecutive weeks. (Requirements apply.)
- Extends through 2010 the $250,000 maximum deduction under Section 179 for equipment and other qualifying asset purchases. The $250,000 expensing limit begins to phase out when qualifying asset purchases exceed $800,000.
Each eligible new hire must provide the employer with a signed affidavit certifying that he or she was unemployed during the 60 days before beginning work or, alternatively, worked no more than a total of 40 hours for someone else during the 60-day period. The new employee can’t be “related” to the employer and can’t be a replacement for a former employee unless the former employee was terminated for cause or left voluntarily. The payroll tax relief is available for eligible employees who begin work after February 3, 2010, and before January 1, 2011. Please contact us for assistance.
Health Care Commentaries is
provided by Somerset’s
Health Care Team
for our clients and other interested persons upon request. Since
technical information is presented in generalized fashion, no final
conclusion on these topics should be made without further review. For
additional information on the issues discussed, please contact a member
of our Health Care Team. This
document is not intended or written to be used, and cannot be used, for
the purpose of avoiding tax penalties that may be imposed on the
Somerset CPAs,
P.C.
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www.SomersetHealthCareTeam.com
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