Obama Signs HIRE Act: BNA's Legislative Update

The U.S. Income Portfolios Library is an essential federal tax research service that provides a unique combination of the expert analysis of more than 200 Tax Management Portfolios™, news &...

Hiring Incentives to Restore Employment Act (H.R. 2847)

Subscribers: Log on to the BNA Tax & Accounting Center  for detailed analysis of the Act written by the BNA Tax & Accounting Editorial staff, full text of the legislation , perspective , and Client Letters .

On March 18, 2010, President Obama signed into law the Hiring Incentives to Restore Employment Act of 2010 to help businesses hire and retain new employees. The Act features a $13 billion tax credit to encourage businesses to hire workers who have been unemployed for at least 60 days, an extension of Build America Bonds used by state and local governments to cut financing costs for infrastructure projects, and an extension of increased expensing limits for small businesses. See below a quick summary:

  • Payroll Tax Forgiveness for Hiring Unemployed Workers:Provides payroll tax forgiveness for employers hiring individuals who have been unemployed for at least 60 days, beginning Feb. 3, 2010, and ending Dec. 31, 2010.
  • Business Credit for Retention of Certain Newly Hired Individuals in 2010: Gives an additional income tax credit up to $1,000 for employers, equal to 6.2 percent of paid wages for every new employee retained for 52 weeks.
  • Increase in Expensing of Certain Depreciable Business Assets: Extends higher limits for Section 179 small business expensing through 2010, allowing small businesses to deduct up to $250,000 from taxable income, but the value is decreased by the amount by which the cost of qualifying property placed in service exceeds $800,000.
  • Refundable Credit for Certain Qualified Tax Credit Bonds: Expands the Build America Bonds program to allow issuers of other qualified tax credit bonds used for construction of schools and energy-related projects to receive refundable credits. The bonds provide a direct subsidy of 65 percent of the interest payment to the bond issuer instead of the bond holder.
  • Foreign Account Tax Compliance: Imposes a 30 percent withholding penalty on foreign financial institutions that do not agree to disclose their U.S. account holders to the Internal Revenue Service; requires taxpayers to disclose their foreign accounts on their U.S. tax returns; increases the statute of limitations to six years for failure to report certain offshore transactions and income; clarifies when a foreign trust is considered to have a U.S. beneficiary; treats substitute dividend and dividend equivalent payments to foreign persons as dividends for purposes of U.S. withholding; delays implementation of a law that would allow for simpler accounting of worldwide interest allocation until 2021.
  • Increase in Payment of Corporate Estimated Taxes: Increases corporate estimated tax payments for corporations with at least $1 billion in assets for the third quarters of 2014, 2015, and 2019.

 For more detailed analyis on the HIRE Act take a free trial to the U.S. Income Portfolios Library .