New Tax Benefits for Hiring New Employees - Engine Builder Magazine

New Tax Benefits for Hiring New Employees


By Richard Lipton, CPA

These provisionsare part of the Hiring Incentives to Restore Employment (HIRE) Act
enacted into law by President Obama on Mar. 18.

Employers who hire unemployed workers this year (after Feb. 3, 2010 and
before Jan. 1, 2011) may qualify for a 6.2% payroll tax incentive, in
effect exempting them from their share of Social Security taxes on
wages paid to these workers after Mar. 18, 2010.

This reduced tax withholding will have no effect on the employee’s
future Social Security benefits, and employers would still need to
withhold the employee’s 6.2% share of Social Security taxes, as well as
income taxes. The employer and employee’s shares of Medicare taxes
would also still apply to these wages.

In addition, for each worker retained for at least a year, businesses
may claim an additional general business tax credit, up to $1,000 per
worker, when they file their 2011 income tax returns.

The two tax benefits are especially helpful to employers who are adding
positions to their payrolls. New hires filling existing positions also
qualify but only if the workers they are replacing left voluntarily or
for cause. Family members and other relatives do not qualify.

In addition, the new law requires that the employer get a statement
from each eligible new hire certifying that he or she was unemployed
during the 60 days before beginning work or, alternatively, worked
fewer than a total of 40 hours for someone else during the 60-day
period. The IRS is currently developing a form employees can use to
make the required statement.

Businesses, agricultural employers, tax-exempt organizations, and
public colleges and universities all qualify to claim the payroll tax
benefit for eligible newly hired employees. Household employers cannot
claim this new tax benefit.

Employers claim the payroll tax benefit on the federal employment tax
return they file, usually quarterly, with the IRS. Eligible employers
will be able to claim the new tax incentive on their revised employment
tax form for the second quarter of 2010.

Revised forms and further details on these two new tax provisions will be posted on during the next few weeks.


L. Lipton CPA & Associates LLC, located in
Florham Park, N.J.,
draws on its founder’s 10 years as a stockholder and manager of
family-owned Sam’s Tire Co. in Paterson, N.J.

L. Lipton CPA & Associates LLC “is structured to personally serve
large and small clients who have a need for business consulting
services as well as accounting and tax services. We have even developed
a niche in the area of forensic accounting. Our clients have realized
that this combination of skills is extremely valuable in providing the
highest quality professional services in today’s and the future’s
economy.” – Richard L. Lipton CPA


Contact Richard L. Lipton CPA & Associates LLC:

Call: 973-

[email protected]


You May Also Like

Utilizing Instagram

“When we started, we had no business at all… that’s when I started using Instagram,” Yaghoubian says. “Back then I didn’t know a lot about social media, but it works for business really well, and especially the automotive industry on Instagram.”

The Industry has changed, so should you.

“One picture I posted got 7,600 likes, it reached 112,000 people, I got 982 profile visits from that post, 758 people saved it, and 208 people sent it to other people,” says Aaron Yaghoubian, owner of Arlington Machine in Riverside, CA, talking about an Instagram photo he shared in August of an Evo 8 short block project. “You can’t beat it. Some engine builders are over here crying, but they don’t want to use something that’s free. They have the device in their hand, now download the app and do it.”

Higher Revving Education

We’ve all seen the ads in magazines and online for schools, classes and seminars on tuning an ever-increasing number of engines and even transmissions in today’s cars and trucks. The better ones will include the use of a chassis dyno to show real-time results of the step-by-step methods they teach.

Chassis vs Engine Dyno

We spoke with a couple shops that utilize both dyno types to get their take on the advantages, disadvantages and reasons to have one over the other or both.

Tradeshow Season

While the rest of the world tends to slow down in the fourth quarter, our industry is starting to rev up. That’s because it’s tradeshow season, and the excitement for next year is always palpable!

OE Parts vs. the Aftermarket

Many of your customers believe that OEM parts are better than aftermarket parts. We wanted to dispel some of the myths once and for all. Without getting into the mud about which brands are better. It is important to note that not all parts are created equal, and this includes both aftermarket and OE replacement parts.

Other Posts

Setting Up an Instagram Account

The old saying goes, “A picture is worth 1,000 words.” Well, in the world of social media, that same picture is not just worth 1,000 words, but could also be worth thousands of dollars in new business for your engine shop. By now you’ve likely seen our features on setting up and utilizing Facebook for your business. Next on our ‘to-do list’ is an introduction to Instagram for those of you who haven’t started utilizing this social media platform.

The Potential in Differential

Is growth part of your business strategy? It comes in a lot of different forms, but when it’s adding a new service offering or product for your customers, it can be nerve-racking at the very least. The additional investment in tools, equipment, training or people weighed against the unknown outcome leaves you holding all the risk, unless there is something that’s a perfect fit.

How To Put Your Facebook Page To Work

A couple months ago, we walked you through the setup of a Facebook business page. Hopefully you’ve gone ahead and created that page and took some time over the last couple months to play around with ways to engage with an audience. If not, go back and check out the February issue. It’s worth your while to do so!

Intellectual Property Rights Enforcement

Once you’ve obtained your IPR, then what? What can you do when you find another person or business violating your patent, trademark, or trade dress? Below, we take a closer look at the steps you can take to enforce your IPR against unauthorized use.