Hiring Incentives to Restore Employment (HIRE) Act Are you thinking of hiring new employees, or possibly rehiring workers you laid-off? You may qualify for a payroll exemption as well as a business credit under the newly enacted HIRE Act. About the Hire Act -- Key tax changes will affect businesses through the new “Hiring Incentives to Restore Employment Act of 2010” (HIRE Act) which President Obama signed into law on March 18, 2010. The hiring incentives contained in this Act are available for newly hired employees who start work after February 3, 2010 and by no later than December 31, 2010 and for compensation paid from March 19, 2010 through December 31, 2010. The newly hired employee must certify he or she was not employed more than 40 hours during the 60 day period ending on their start date. If a new hire replaces someone, the credit is allowed only if the worker quit or was fired for cause. Hiring Students This Summer? --- Students you hire this summer may qualify for the employer social security tax exemption. Students who didn’t work because they were taking classes are not disqualified. This could result in an immediate tax benefit equal to the employers 6.2% share of Social Security tax on wages paid. The break is available even if a laid off worker is rehired by the same company as long as the employee worked fewer than 40 hours in the past 60 days. Hiring Incentives for Spouse or Relatives -- Hiring incentives can also be potentially claimed for wages paid to a business owner’s newly hired spouse or for wages paid to other newly hired relatives of a minority business owner (a person who owns 50% or less of the employer, after considering both direct and indirect ownership). Some Businesses May Qualify for a FICA Tax Refund According to a recent District Court decision, severance pay for laid-off workers isn't subject to social security taxes. (U.S.v.Quality Stores, Inc.). If you paid severance pay to laid-off workers dating back to 2006, you should consider filing a protective refund claim for taxes paid. Contact Dane Tax Solutions to determine whether you qualify for this refund and we can help you file a refund claim.