Obama HIRE Act affects area businesses

President Obama signed into law a bill that could benefit many business in the Black Hills area. The HIRE Act states that if you (the business owner) hire an employee after February 3, 2010 that has been unemployed or worked less than 40 hours (total) in the last 60 days, then you do not have to match the 6.2% social security tax on those employees’s wages for wages after March 18, 2010 through December 31, 2010. The employer social security tax exemption only applies to the first $106,800 of wages for each employee. Seasonal and part time employees will qualify if they meet the requirements. However, newly hired family members of the business owner do not qualify. The tax exemption is not permitted if a person is hired to replace another employee unless the other employee left voluntarily or was fired for just cause. There is no limit on the minimum number of hours the employees have to work during the week after they are employed. In addition, the exemption can be claimed on as many new employees with no limit on the total amount of tax benefits that can be claimed by you. I think this could be very beneficial for the businesses that hire high school and college students, or other seasonal help for the summer since most of them could meet the requirements.

Michelle Minnerath, Tax Manager and CPA

Homebuyer Credit Ends Soon!

Remember: be eligible to claim the first-time homebuyer tax credit, you must purchase or enter into a binding contract to purchase a principal residence by 4/30/10. If you have a binding contract by 4/30/10, you must close on the home by 6/30/10. To qualify as a first-time homebuyer, you must not have jointly or separately owned another principal residence during the three years prior to the date of purchase. To be a long-time resident homebuyer, you must have lived in the same principal residence for any consecutive five-year period during the eight-year period ending on the date the new home is purchased.