(RIVERWOODS, ILL., March 17, 2010) – CCH has issued a Special Tax Briefing on the Hiring Incentives to Restore Employment (HIRE) Act which provides tax breaks to businesses that add employees to their payrolls and invest in equipment. The Senate passed the bill on March 17, 2010; the House previously passed the bill on March 4 . President Obama is expected to sign the bill into law. The CCH Briefing covers provisions of the HIRE bill and lists the many tax issues for 2010 that are still unresolved. To read the Briefing, click here.
Hiring and retention tax incentives in the bill provide forgiveness of Social Security tax for each new “qualified” employee who is hired after February 3, 2010 and before January 1, 2011. The forgiveness would apply to pay periods beginning on or after the date of enactment through the end of 2010. Businesses would also receive a $1,000 tax credit for qualified employees who then remain employed for one year. A “qualified” employee is basically someone who has been unemployed for at least 60 days prior to being hired.
“The incentives are structured to encourage businesses to hire new employees sooner rather than later,” said Mark Luscombe, JD, LLM, CPA, CCH Principal Federal Tax Analyst.
Businesses would also benefit from an extension of enhanced Section 179 expensing, although an extension of bonus depreciation is not in the bill. The Build America Bonds program would be liberalized under the legislation, which is paid for by increased withholding and reporting requirements on foreign financial accounts of over $50,000.
“What’s impressive is the list of expired and expiring measures that aren’t addressed in the bill,” Luscombe said.
These include the COBRA subsidy, which expires at the end of February, expired provisions for teacher’s classroom expenses, deductibility of state and local sales tax, the extra standard deduction for real estate taxes, the higher education deduction and a host of business provisions. Many of these are contained in separate “extenders” bills that have passed in the House and Senate, but which have not been reconciled.
“Add in the expired estate tax, a lowered alternative minimum tax exemption and the upcoming sunset of the Bush tax cuts at the end of this year, and it looks as though Congress will have a lot of tax legislation still on its plate even if this bill becomes law,” Luscombe said.
CCH Tax Briefings
About CCH, a Wolters Kluwer business
CCH, a Wolters Kluwer business (CCHGroup.com) is a leading provider of tax, accounting and audit information, software and services. It has served tax, accounting and business professionals since 1913. Among its market-leading solutions are The ProSystem fx® Suite, CorpSystem®, CCH® IntelliConnect™, Accounting Research Manager® and the U.S. Master Tax Guide®. CCH is based in Riverwoods, Ill.
Wolters Kluwer is a market-leading global information services company. Professionals in the areas of legal, business, tax, accounting, finance, audit, risk, compliance, and healthcare rely on Wolters Kluwer’s leading, information-enabled tools and solutions to manage their business efficiently, deliver results to their clients, and succeed in an ever more dynamic world. Wolters Kluwer has 2009 annual revenues of €3.4 billion ($4.8 billion/£3.0 billion), employs approximately 19,300 people worldwide, and maintains operations in over 40 countries across Europe, North America, Asia Pacific, and Latin America. Wolters Kluwer is headquartered in Alphen aan den Rijn, the Netherlands. Its shares are quoted on Euronext Amsterdam (WKL) and are included in the AEX and Euronext 100 indices.