The HIRE Act

Businesses that hire new employees may qualify for two tax incentives under the HIRE Act. This new tax law was signed into law by President Obama on March 18, 2010, after being approved by Congress on March 17. Businesses that hire new employees will not have to pay the employer's share of Social Security tax (6.2% of wages) from the date of hire through the end of 2010. Additionally, businesses that retain a newly hired employee for at least 52 consecutive weeks can qualify for a tax credit of up to $1,000. Both tax breaks are available for new hires who have been unemployed for at least 60 days immediately prior to beginning their new job.

This qualification requirement will impact job-seekers. New hires may be asked to certify that they have in fact been unemployed so that the hiring employer can qualify for the tax breaks. To be an eligible new hire, an individual will need to have worked not more than 40 hours during the 60-day period ending on the day that the person begins their new job. Individuals can be hired in any capacity: full-time or part-time, but to qualify for the credit they will need to work for at least 52 consecutive weeks.

Find new IRS form W-11 and frequently asked questions at the IRS website.