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$1,000 HIRE Credit: Does your company qualify?

March 21st, 2011 by Tim Schlotterer

On March 18, 2010 President Obama signed into law the Hiring Incentives to Restore Employment Act (HIRE). This is also known as the Jobs Bill.  This new law provided some payroll tax incentives for qualifying new employees in 2010 and a $1,000 tax credit could be available in 2011:

  • The employee must have been hired between February 3, 2010 and January 1, 2011;
  • The employee must have been unemployed for at least 60 days prior to hiring;
  • The employee must be employed for at least 52 consecutive weeks;
  • The employee’s wages for the last 26 weeks of the period must equal at least 80% of the wages for the first 26 weeks of the period;
  • The employee cannot be a relative of the employer (or in the case of a corporation, the employee cannot be a relative of an individual that owns, directly or indirectly, more than 50% of the outstanding stock of the corporation).

Some special items to note:

  • For calendar year taxpayers, this credit will be reported on the 2011 tax return.
  • The credit is the lesser of $1,000 or 6.2% of the employee’s wages during the 52 week consecutive period.  To receive the entire $1,000, the employee’s wages must be greater than $16,130.
  • This credit is only available against a taxpayer’s regular income tax (not AMT).
  • The 20 year carry forward of unused business credits applies.

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