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Who is a Qualified Employer?
As stated above, a qualified employer is any employer, other than a federal or state governmental entity.
Who is a Qualified Employee?
A qualifying employee is any full or part time employee who:
The first tax benefit is immediate and provides the employer with a payroll tax exemption, such that the employer will be exempt from remitting payment of the employer’s 6.2 percent share of the social security tax on wages paid to a qualifying employee from March 19, 2010 through December 31, 2010.
Additional Deferred Business Tax Credit Up To $1000
The second tax benefit applies if the qualified employee remains employed for at least 52 consecutive weeks and certain pay levels are maintained. If such is the case, the employer will be eligible to claim a one-time general business tax credit (the New Hire Retention Credit ) for each qualifying employee employed for a minimum of 52 consecutive weeks. The $1,000 maximum credit applies for wages paid in excess of $16,129.03.
It should be noted that employers may NOT claim both the New Hire Retention Tax Credit and the Work Opportunity Tax Credit (WOTC). The WOTC is an employer business tax credit for employing individuals who are members of certain targeted groups. See IRS Form 8850 for more information.
The HIRE Act also extends the $250,000 tax deduction for small businesses that make capital improvements in 2010.
What Employers Should Do Now
Employers seeking to hire new employees should:
This office does not provide tax advice. Please confirm all information in this post with your CPA.
IRS CIRCULAR 230 DISCLOSURE: To ensure compliance with requirements imposed by the Internal Revenue Service, we inform you that, to the extent this communication (or any attachment) concerns any tax matter, it was not written to be (and may not be) relied upon to (1) avoid tax-related penalties under the Internal Revenue Code, or (2) promote, market or recommend to another party any transaction or matter addressed herein (or in any such attachment).
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Disclaimer: The information presented on this web site was prepared by Melissa C. Marsh for general informational purposes only and does not constitute legal advice. The information provided in my articles and alerts should not be relied upon, or used as a substitute for professional legal advice from an attorney you retain to advise or represent you. Your use of this Internet site does not create an attorney- client relationship. Transmission of this article is not intended to create, and receipt of it does not constitute, an attorney-client relationship. All uses of the contents of this site, other than personal uses, are prohibited. You may print or email a copy of any information posted on this web site for your own personal, non-commercial, use, but you may not publish any of the articles or posts on this web site without the Express Written Permission of Melissa C. Marsh.
Located in Los Angeles, California, the Law Office of Melissa C. Marsh handles business law and corporation law matters as a lawyer for clients throughout Los Angeles including Burbank, Sherman Oaks, Studio City, Valley Village, North Hollywood, Woodland Hills, Hollywood, West LA as well as Riverside County, San Fernando, Ventura County, and Santa Clarita. Attorney Melissa C. Marsh has considerable experience handling business matters both nationally and internationally. We routinely assist our clients with incorporation, forming a California corporation, forming a California llc, partnership, annual minutes, shareholder meetings, director meetings, getting a taxpayer ID number (EIN), buying a business, selling a business, commercial lease review, employee disputes, independent contractors, construction, and personal matters such as preparing a will, living trust, power of attorney, health care directive, and more.