On March 18, 2010, the President signed into law the Hiring Incentives to Restore Employment (HIRE) Act (H.R. 2847).

Important provisions of the HIRE Act include:

• Extends the existing §179 expensing ($250,000 with an $800,000 threshold) for another year;
• Provides relief from the employer share of OASDI (6.2%) for wages paid to qualified employees, beginning on March 19, 2010, through December 31, 2010. Qualified employees, generally, are individuals hired after February 3, 2010, and before January 1, 2011, who certify that they were employed for no more than 40 hours in the 60-day period ending on the date that employment begins.
• Provides employers with a credit equal to the lesser of $1,000 or 6.2% of qualifying wages paid to a worker who qualifies under the payroll tax holiday described above and who is retained for at least 52 weeks.

"Tax preparer relief"

Even though all of the provisions are effective immediately, tax professionals won't have to deal with any of them during tax season (other than advising clients). The law provides that businesses will prepare their first quarter 941 as if the law were not in effect. They will claim any qualifying payroll tax relief earned in the first quarter as a credit on their second quarter 941. The $1,000 retained worker credit is earned only after a worker has been retained for at least 52 weeks. Since a qualifying employee cannot have been hired any earlier than February 4, 2010, calendar-year employers will claim the credit on their 2011 returns.