Relatives may qualify for HIRE Act
Posted 6-3-2010 | By Anthony Oster | Download Article
The Hiring Incentives to Restore Employment (HIRE) Act, signed into law on March 18, 2010, encourages employers to hire and retain new workers; in some circumstances those workers may be relatives.
The HIRE Act gives employers who hire unemployed workers after February 3, 2010 and before January 1, 2011 the opportunity to skip paying 6.2% social security tax on the worker’s wages. In addition, if the worker remains employed for a year, the employer may qualify for a tax credit up to $1,000 per worker.
Qualified employees include workers who have not worked more than 40 hours during the 60-day period before being hired. The workers can be part-time or full-time and in some circumstances, also can be related to the employers or owners of the business.
The table below identifies the employee relationships that may qualify for the credit by entity type:
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Sole
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S- or C-
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Proprietors
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Partnerships
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Corporations
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Spouse
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Yes
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Yes*
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Yes*
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Siblings
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No
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Yes*
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Yes*
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Children
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No
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Yes*
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Yes*
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Other relatives
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No
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Yes*
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Yes*
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* These employee relationships qualify if the spouse, sibling, children or other relatives are not related to a more than 50% owner (either directly or indirectly) of the partnership or company.
For more information, please contact Tony Oster, CPA, at 651-407-5852 or aoster@hlbtr.com.