The New HIRE Law in a Nutshell

            This federal statute, now in effect, gives FICA tax breaks and other incentives to employers who hire new workers.

            Key points:

1.      Applies to hires after 2/3/10 and before 1/1/11 only.

2.      For each new hire you get a break on the 6.2% Social Security payroll withholding.  There is no break on the Medicare withholding.

3.      If the worker is retained for at least a year, you can also claim up to a $1,000 credit on your 2011 corporate tax return.

4.      The HIRE provisions apply to new positions being filled or existing positions being vacated, provided the incumbent employee is resigning or being fired for cause.

5.      If the worker you hire is a family member or relative, the law is inapplicable.

6.      You have to get a statement from each eligible new hire certifying that he or she was unemployed during the 60 days before beginning work or, alternatively, worked no more than 40 hours for anyone during the 60-day period. The IRS is currently developing a form employees can use to make the required statement.