Senate Passes HIRE Act

On Wednesday, the Senate overwhelmingly approved by a 68-29 vote the Hiring Incentives to Restore Employment (HIRE) Act (H.R. 2847), the nearly $18 billion jobs bill that will provide employers with financial incentives for hiring unemployed workers. Specifically, an employer would be exempt from paying its share of 2010 Social Security taxes on any new hire who has been without full-time employment for at least 60 days. The maximum tax break an employer could gain per employee under this provision would be $6,621, or 6.2 percent of total wages paid in 2010 up to the $106,800 FICA wage cap. Employers would also be eligible to receive a $1,000 income tax credit for every new employee retained for 52 weeks. Earlier this week, the Senate voted 61-30 to limit debate on this measure.

The HIRE Act was introduced as an amendment (S. Amt. 3310) to H.R. 2847, a more expansive jobs bill the House approved in December. The Senate had passed the smaller jobs bill last month, but needed to once again clear the measure because the House made minor amendments to the bill.

In addition to the hiring provisions, the HIRE Act extends a tax break included in the American Recovery and Reinvestment Act (“ARRA” or “Stimulus Bill”) that permits small businesses to deduct up to $250,000 of the cost of qualifying capital investments in the year purchased, instead of requiring businesses to depreciate such equipment over time. The Act also includes a one-year reauthorization of highway funding and other public transportation and infrastructure programs.

President Obama is expected to sign this bill into law.

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