On March 18, 2010, the IRS recently released IR-2010-33 which provides details of new HIRE Act tax benefits being give to employers for hiring previously unemployed or part time employees.
The HIRE Act grants employers a 6.2% payroll tax incentive for certain new employees hired after February 3, 2010 and prior to January 1, 2011 and for wage paid to such new employees after March 18, 2010.
This incentive effectively results in the employer not having to pay the employer’s share of Social Security taxes on the employee’s wages paid after March 18, 2010. The incentive has no no effect on the employee’s future Social Security benefits or Medicare taxes.
This incentive hopefully will cause small business to start hiring new employees since their out of pocket wage cost is reduced by approximately 6.2%.
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