2010 Hire Act Provides Tax Breaks for Business

New Tax Benefits for Hiring Unemployed

HIRE Act provides incentives for businesses hiring those previously unemployed

While many employers have had to cut back, TempForce of Gainesville is slated to hire more people this year than just one year ago.  With new hires on the books, TempForce plans to take advantage of the HIRE Act on its 2011 tax returns. This two-pronged tax incentive for employers has the potential for significant savings. 

Under the HIRE Act, eligible hires may qualify a business for a 6.2 percent payroll-tax incentive. For each worker retained for at least a year, businesses may claim an additional general business tax credit of up to $1,000 per worker. To be eligible for the HIRE Act, a person must be unemployed 60 days or more prior to an offer of employment.  In order for a business to take advantage of this tax credit, each worker must sign an affidavit stating that they were not employed for more than 40 hours in the 60 days prior to employment. 

This year, half of TempForce’s hires were placed into jobs created by local businesses who received Florida Back to Work funding through FloridaWorks. This stimulus program reimbursed employers up to 93 percent of wages for creating jobs. 

Although staffing agencies may be regarded as primarily for temporary employment, TempForce reported that approximately 90 employees out of their 574 hires in 2009 were employed for 50 weeks or more. 

“We offer immediate solutions allowing employers’ staffing needs to be handled without the cost of permanent employees,” said Carolynn Buchanan, owner, TempForce of Gainesville.  “Many companies are using our services as a cost effective option while they work to reestablish their share of the market.  They also have the benefit of securing solid candidates for permanent positions as they become available.” 

In order to encourage workers to complete the affidavit required to take advantage of the Hire Act, TempForce’s corporate office created a contest. Any employee who turned in an affidavit was entered into a drawing for an Apple iPad. Out of 382 employees that TempForce of Gainesville currently employs, 105 forms eligible for a tax credit were collected. The HIRE Act credit has the potential to save TempForce more than $100,000.

HIRE Act Guidelines:

  • Employers who hire unemployed workers this year (after Feb. 3, 2010 and before Jan. 1, 2011) may qualify for a 6.2 percent payroll-tax incentive, in effect exempting them from their share of Social Security taxes on wages paid to these workers after March 18, 2010.
  • For each worker retained for at least a year, businesses may claim an additional general business tax credit, up to $1,000 per worker, when they file their 2011 income tax returns. Any new hire must certify “by signed affidavit,” under penalties of perjury, that he/she has “not been employed for more than 40 hours during the 60-day period ending on the date such individual begins such employment.”

For more information on the HIRE Act, forms and guidelines click here or consult your tax professional.

For a flyer with the HIRE Act information click here.

Another new tax benefit Additionally, Section 179 allows some businesses to write-off up to $250,000 of qualified equipment and software during the 2010 tax year. Click here to read more.