In an effort to reduce unemployment, on March 18, 2010, President Obama signed into law the Hiring Incentives to Restore Employment Act. Of particular interest to employers, the Act provides incentives for the hiring of unemployed individuals (who must have worked 40 hours or less during the 60 days preceding the new employment) after February 3, 2010 and before January 1, 2011. The Act exempts most businesses that hire such individuals from the 6.2% Social Security employer payroll tax for those employees (for 2010, employers are generally required to pay Social Security payroll taxes in an amount equal to 6.2% of the first $106,800 of wages paid to an employee), from the date of enactment through the end of 2010, and provides for an additional $1,000 general business tax credit per each such newly-hired employee whose employment with the employer continues for a full year. For this treatment, the new hire may not have been hired to replace another employee (unless the employee voluntarily resigned or was terminated for cause) and may not be a family member.
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