Thompson/Reuters has released an excellent summary of Congress’ passage of the new employment act today. The summary follows below. If you have any questions regarding the legislation’s impact on your business, please give us a call.
Congress Passes HIRE Act Carrying Hiring Incentives, Stimulus Measures, and New Foreign Account Tax Compliance Rules
Today, the Senate by a vote of 68-29 approved H.R. 2847, carrying the Hiring Incentives to Restore Employment (HIRE) Act, as passed by the House. Thus, the HIRE Act is cleared for the President’s signature. The HIRE Act:
- Exempts employers from paying the employer share of Social Security employment taxes on wages paid in 2010 to newly hired qualified unemployed workers. These are workers who: (1) begin employment with the employer after February 3, 2010 and before January 1, 2011, (2) were previously unemployed and (3) do not replace other employees of the employer. The payroll tax relief applies only for wages paid with respect to employment beginning on the day after the enactment date (the date the HIRE Act is signed into law by the President) and before 2011.
- Provides employers with an up-to-$1,000 tax credit for retaining qualified unemployed workers. The workers must be employed by the employer for a period of not less than 52 consecutive weeks, and their wages for such employment during the last 26 weeks of the period must equal at least 80% of the wages for the first 26 weeks of the period.
- For tax years beginning in 2010, boosts to $250,000 the maximum amount that can be expensed under Code Sec. 179, and boosts to $800,000 the beginning of the investment based phaseout amount.
- Allows issuers of certain tax credit bonds to elect to receive a direct payment instead of a tax credit to the bondholder.
- Enacts a comprehensive set of measures to reduce offshore noncompliance.
- Delays the application of worldwide allocation of interest for an additional three years.
- Tinkers with estimated tax payments of large corporations in future tax years.
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