With the nation’s unemployment rate still hovering around 10%, help may be on the way in the form of new legislation signed into law by President Obama last week.  The Hiring Incentives to Restore Employment (HIRE) Act, passed by the Senate on Wednesday with bipartisan support, provides employers with new incentives for hiring and retaining workers. 

The core provision of HIRE is $13 billion in tax breaks for private-sector businesses that hire unemployed workers this year. HIRE also waives the 6.2% Social Security payroll tax until December 31, 2010, for each new worker a company hires, as long as that worker had previously been unemployed for at least 60 days.  In addition, there is a tax credit of up to $1,000 for each qualified new hire a company retains on its payroll for at least 52 consecutive weeks.  HIRE also allows small businesses to write off $250,000 of the cost of new equipment purchased this year, rather than having to depreciate the cost over time.  As part of the overall plan to improve the nation’s infrastructure, HIRE additionally provides $20 billion into the highway trust fund for spending on highway and transit programs.

In signing HIRE on Thursday, President Obama stated that while this legislation was necessary, more needs to be done to spur job growth, including helping small businesses get loans to expand, investing in infrastructure and offering incentives to encourage energy efficiency.

Additional jobs and unemployment-related tax legislation is expected to make its way through Congress soon, including extensions to COBRA benefits and targeted small-business tax relief.

This newsletter is a publication of Nochumson P.C. and is intended for general information only. It should not be construed as legal advice with respect to any particular situation, and readers should not act upon information contained in this newsletter without first consulting an attorney. Copyright © 2009.