Back in March, the nearly $18 billion Hiring Incentives to Restore Employment (HIRE) Act was signed into law. At the time, Jewelers of America notified members of two key provisions in the bill related to qualified new employees:
- A payroll tax exemption that offers an employer exemption from Social Security payroll taxes for every worker hired after Feb. 3, 2010 and before Jan. 1, 2011, who had previously been unemployed for at least 60 days.
- An additional $1,000 income tax credit for every new employee retained for 52 weeks to be taken on the employer's income tax return.
In the Businessweek.com article, “Don't Overlook the Jobs Bill's Tax Incentives,” Karen E. Klein writes that few companies have taken advantage of the incentives. In the article, Brandon Edwards, president of The Tax Credit Company -- a Los Angeles-based consulting firm, estimates that 90% of small companies are unaware of the incentives.
Among Edwards’ key points:
- Qualified new employees had to have been out of work for two months—something Edwards says is not uncommon in this environment, and isn’t a reflection on job qualifications. While he notes the projected qualification rate is 15% to 30%, in some parts of the country he’s seeing a rate of 40% to 60%.
- Don’t shy away from asking a prospective employee about recent job history, which is a standard part of any job interview. The federal government—through the incentives—is encouraging employers to hire those who meet the criteria.
- While payroll companies have had to make sure they accommodate the program, Edwards says small businesses who hire a qualified employee should double check to ensure their company is not paying full payroll tax for that employee.
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