The second incentive includes a tax credit for businesses of up to $1,000.00 if these employees are retained for 52 weeks or more, and the amount of pay they receive in the second 26-week period is essentially equal to the amount of pay they receive in the first 26-week period.
Whereas you should always hire the best person for the job, you may want to keep in mind the following when you are looking at candidates.
To qualify a newly-hired employee:
- Must start work after February 3, 2010 and before Jan 1, 2011.
- Must not have been an employee for more than 40 hours during the 60 days before start date.
- Must not replace a current employee (unless that employee was separated from employment voluntarily or for cause).
- Must not be related to the employer or directly or indirectly own more than 50% of the business.
- May be previously laid-off employees.
- May be part-time or less than full time employees.
In order to receive the retention credit the new worker must:
- Be employed 52 consecutive weeks. A prorated credit for a short period is not allowed.
- Domestics and workers eligible for a “foreign earned income exclusion” are not eligible.
The tax credit will be available to most employers on the 2011 income tax return. It should be noted, however, that the HIRE Act does not allow carry back of any unused Section 38 business credit that is attributable to the provision for retained workers.
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