If you’re thinking of taking on new employees this year, the HIRE Act could bring big savings to your nonprofit
organization.
For any new hire who has been unemployed for the past 60 days, a tax credit is available to employers for their
6.2 percent portion of the new employee’s Social Security tax.
To take advantage of the credit, you’ll need to act fast. The act covers wages paid to employees between March 19, 2010,
and Dec. 31, 2010, and covers up to $6,621 in Social Security tax.
There is no limit on the number of employees who can qualify, and both full-time and part-time employees are eligible.
You may already have an employee on the payroll who qualifies. The employee must have been hired between Feb. 3, 2010, and Dec. 31, 2010, and the new hire cannot have been employed for more than 40 hours during the 60-day period ending with the date
employment begins.
There is no limit on the number of employees who can qualify, and both full-time and part-time employees are eligible. There is also no minimum number of hours that the new employee is required to work.
So, if you have a big fundraising event or other effort that would require part-time help, hiring workers who have been unemployed for more than two months may bring added staff savings.
There are a few caveats. The new hire cannot be a relative of the employer or replace another employee, unless the former employee left the position voluntarily or for cause.
In addition to the tax credits for hiring unemployed workers, the act also extends enhanced deductions to organizations that expand by adding machinery and equipment or replace existing business assets.
