This week we talk taxes.
Except on Thursday. That’s April Fool’s Day.
We start with the new jobs bill, the Hiring Incentives to Restore Employment (HIRE) Act of 2010.
Here are the key tax provisions.
Section 179 Expense Deduction
The Act extends the higher $250,000 Section 179 expense deduction. The extension is retroactive to January 1, 2010, and applies to qualifying assets purchased and placed in service during 2010.
The $800,000 threshold for reducing the deduction remains the same.
The bill does not extend the 50% bonus depreciation provisions.
Social Security Tax Relief
The ACT exempts qualifying employers from the 6.2% Social Security payroll tax, for new employees hired after February 3, 2010 on wage paid after March 18, 2010 and on or before December 31, 2010.
The new hire must certify that he or she had been unemployed for at least 60 days prior to hiring. The IRS will issue guidance on the certification requirement.
For the first quarter, the social security exemption amount will be credited against the employer’s OASDI liability for the second quarter. For new-hire wages paid starting April 1, the employer will claim a direct OASDI credit in depositing payroll taxes under the regular deposit rules.
Retained worker business credit.
The Act also includes a tax credit for wages paid to new hires who qualify for the social security tax relief noted above, and who are retained for at least a year.
The credit is the lesser of $1,000 or 6.2 percent of the wages paid by the employer to each qualified retained worker during the 52 week period.
More tomorrow.
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