2010 has seen changes in the business landscape for all of us, from the small start up to the large corporations, including H.R 2847, the Hiring Incentives to Restore Employment Act (HIRE Act) aimed at encouraging businesses to hire and retain unemployed workers. .

The nitty gritty of the HIRE Act focuses at putting America to work by providing businesses with a tax credit for qualified employees retained for at least one year, of up to $1,000 per worker. As well as a payroll tax exemption of the employers’ share (6.2%) of Social Security payroll taxes on the wages of a qualified workers paid between March 19, 2010 and December 31, 2010. In total these tax savings can add up to $7,621.60 ($1000 credit plus up to $6,621.60 in forgiven Social Security withholding for 2010) per employee. Better yet, you don’t have to wait till the next tax filing to see the benefits since the Social Security withholding’s never even leaves your pocket.

To make sure your new employee will save you money check the following:

* Were they hired after Feb. 3, 2010 but before Jan. 1, 2011?
* Were they hired for a newly created position, or a position that opened up from an employee willingly resigning or being terminated for a cause?
* Sorry guys, they can’t be related to you(the employer)
* Your new employee must sign an affidavit (form W-11) stating they have not been employed, or working 40 hours a week, in the prior 60 days to beginning work.

One great, and not as well known, gem in the HIRE Act -a qualified worker meeting the above criteria CAN be a formerly laid off employee of the company! And with no full time work requirements companies, small to medium sized business especially, can rehire at part time those great former employees, already knowledgeable in the field, as well as re-staff positions currently left vacant due to economic down turns, all while saving money!

And since we all love saving money through tax credits and forgiveness’ now is the time to take advantage of these incentives and work with us to maximize effectiveness. As we’ve seen with other tax credit, such as the New Homebuyer Incentives of 2009/2010, requirements and payouts are constantly changing and funds are available only for a limited time. Contact your tax professional for advice(it’s after tax season, and they will love to hear from you!), feel free to contact us for more information or refer to the IRS website for specific details

So how does this Act effect you, as a PEO client? Thanks to the efforts of the National Association of Professional Employer Organization(NAPEO) you can continue the smart decision to focus on what your company does best, and let us what we do best, while still reaping the potentially enormous benefits of the HIRE Act. But plain and simple, whether you hire directly or through a PEO service you can reap the full benefits of the HIRE Act.