CONGRESS, TREASURY BOUYED BY HIRE ACT RESULTS
On August 2nd, the U.S. Department of Treasury released statistics indicating that an estimated 5.6 million workers employed between February 4th and June 30th were qualified for the HIRE Act. Qualified hires are all individuals who were unemployed for the 2 month period before starting a new job after February 3, 2010. The initial incentive is the employer exemption from paying their normal portion of Social Security Tax of 6.2% of the first $106,800 in 2010 wages. Additionally, there is a 2nd year 2011 tax credit of $1000 for each qualified employee who remains with the company for the full one year period after hire.
Ultimately, this will result in several billion dollars of tax savings that employers can now use for other business-related purposes.
Senator Chuck Schumer (D-NY), a senior member of the Senate Finance Committee and legislative sponsor praised, “The Hire Now tax cut has proven to be a timely, targeted and effective job creator, helping middle class Americans find work….and I will be pushing to extend it for an additional six months.”
Treasury will be tracking statistics on a state-by-state basis. Large population states with high unemployment rates provide large numbers of HIRE Act eligible individuals. For example there are more than 756,000 unemployed in California, 340,000 in New York, 300,000 in Florida and 185,000 in Michigan.
NTCI, working through our industry trade association NEON (the National Employment Opportunity Network), will be active on Capitol Hill monitoring any legislative efforts to extend the HIRE Act. If you would like additional legislative information, contact Roy Goldman by phone (732)657-5041 or email Roy.goldman@ntlci.com
The HIRE Act exemption is still available for all 2010 hires with a start date of February 4th or later, and the incentive may be utilized retroactively. If your company is not taking advantage of this program and is interested in doing so, contact us at (615)767-0970.
