• Congress passed the Hiring Incentives to Restore Employment (HIRE) Act on Wednesday and the bill is now awaiting the President's signature.

• The HIRE Act would:

Exempt employers from paying the employer share of Social Security employment taxes on wages paid in 2010 to newly hired qualified unemployed workers. These are workers who: (1) begin employment with the employer after February 3, 2010 and before January 1, 2011, (2) were previously unemployed and (3) do not replace other employees of the employer. The payroll tax relief applies only for wages with respect to employment beginning on the day after the HIRE Act is signed into law by the President and before 2011. 

Provide employers with an up-to-$1,000 tax credit for retaining qualified unemployed workers. The workers must be employed by the employer for a minimum period of 52 consecutive weeks, and their wages for such employment during the last 26 weeks of the period must equal at least 80 % of the wages for the first 26 weeks of the period. 

For tax years beginning in 2010, increase the maximum amount that can be expensed under Code Sec. 179 to $250,000, and increase the beginning of the investment based phase-out amount to $800,000. 

Allow issuers of certain tax credit bonds to elect to receive a direct payment instead of a tax credit to the bondholder. 

Enact a comprehensive set of measures to reduce offshore noncompliance, including new required reporting by foreign financial institutions to the IRS. 

Tinker with estimated tax payments of large corporations in future tax years.

If you have any questions regarding the information in this article, or have any other issues you would like to discuss, please feel free to contact the DZH Phillips tax department at 415.781.2500 or email cpas@dzhphillips.com.