HIRE Act: No more Social Security holiday, but look for tax credit

With the arrival of the 2011 New Year, the HIRE Acts Social Security tax holiday expired. Theres still one more tax benefit to be gained, though, if you hired workers who qualified under the HIRE Act. You can get a tax credit if you keep them employed for at least 52 consecutive weeks, and their wages during the last 26 weeks of employment are at least 80 percent of their wages during the first 26 weeks. The amount of the credit is $1,000, or 6.2 percent of the wages that you paid during the 52 weeks, whichever is less. You can qualify for the tax credit if:

• The worker began employment with you after February 3, 2010, and before January 1, 2011;
• You have the worker sign an affidavit, under penalty of perjury, that he or she has not been employed for more than 40 hours during the 60-day period before becoming employed with you;
• The worker didnt replace another employee, unless the prior employee quit or was fired for cause; and
• The worker isnt a relative of the owner.

For more information, see the FAQs on the IRSs website.