NORTH BAY — The federal new Hiring Incentives to Restore Employment Act of 2010 provides numerous incentives for employers coping with depleted staffs and for job-seekers.
Among the incentives, an employer can receive a 6.2 percent payroll tax credit, essentially exempting it from its share of the Social Security taxes on wages paid to previously unemployed workers, according the Internal Revenue Service.
The reduction is good through January 2011 and will have no effect on the employee’s future Social Security benefits thereafter, meaning employers would still need to withhold the new hire’s 6.2 percent share of Social Security taxes as well as income taxes.
Additionally, if an employer keeps an employee on for at least a full year, the employer could be eligible to receive up to a $1,000 tax credit for each employee, according to a fact sheet by the IRS.
Jill Williams, president and chief executive officer of HR Biz Partners, said HIRE has been helpful, noting that roughly 10 percent of an employer’s gross wage can be covered by HIRE.
“That can be significant,” she said. “HIRE is pivotal because it’s subsidizing payroll taxes. It allows employers to hire with a little less trepidation.”