You still have time to reap the full benefits of the retention credit, reports Elliott Davis, an accounting and financial consulting firm with offices in Charlotte and the Southeast.
The Hiring Incentives to Restore Employment (HIRE) Act offers two valuable tax breaks for hiring certain unemployed workers: payroll tax forgiveness and a retention credit. Although payroll tax forgiveness is available only through Dec. 31 and thus will provide llimited tax savings for hires you make between now and year end, you still have time to reap the full benefit of the retention credit.
The credit applies to workers who are qualifed for the purpose of the payroll tax forgiveness and whom you retain for 52 consecutive weeks. The tax savings per qualified retained workers are equal to the lesser of 6.2% of the wages paid to the worker during the 52 week retention periof or $1,000.
Because the retention period won’t end until 2011, you’ll claim the credit on your 2011 tax return. But you must make the hires by Dec. 31 2011.
Detailed information is outlined Here.