Businesses that hire formerly unemployed workers between February 3, 2010 and December 31, 2010 could be eligible for a tax break under the Hiring Incentives to Restore Employment (HIRE) Act passed earlier this year.
If the new hire was unemployed for at least 60 days prior to being hired, including recent college graduate and rehires, a business can be exempt from its share of the Old Age, Survivors and Disability Insurance tax (OASDI), currently 6.2% of wages up to $106,800. The employee cannot have been hired to replace another employee, unless that other employee left voluntarily or for cause.
An additional tax credit is also available for retaining these employees for one year.
Each case an employer may face is unique and may require legal advice. If you need further information ensuring that your business maximizes its benefits under the HIRE Act, or any other legislation, please contact the author, Valerie Walker, our L&E Department Chair, John Egbert, or one of the other attorneys in our Labor & Employment, Tax or Estate Planning and Probate Departments.
About the Author
Valerie J. Walker is an Associate attorney focusing her practice on litigation, and labor and employment law. Ms. Walker represents clients before state courts and state and federal agencies in discrimination, wrongful discharge and wage litigation cases as well as breach of contract cases. She has previously worked as a law clerk for the National Labor Relations Board in New York City. Contact Ms. Walker at email@example.com or 602.262.5844.