H. R. 2847, the Hiring Incentives to Restore Employment Act of 2010, provides business owners payroll tax breaks and other incentives to hire new workers who have been unemployed or worked fewer than 40 hours for at least 60 days.
The purpose of H. R. 2847 is to offer employers significant financial incentives to hire new workers from the ranks of the under- or unemployed. In return for hiring this class of worker, employers don’t have to pay their 6.2 percent portion of Social Security taxes. In addition, if businesses retain these employees for at least 52 weeks, employers receive another tax break of $1,000 per employee or 6.2 percent of employees’ wages. In order for new hires to quality for the tax breaks, employees must provide proof, such as Form W-11, that they were unemployed when hired. Household employees and employers are ineligible for these tax credits, as are employees who earn over $106,000 per year and those who “displace” an employee who didn’t resign or get fired.
To offset the costs of the HIRE Act, Congress added the Foreign Account Tax Compliance Act to the bill. FATCA requires foreign banks to disclose American account holders and their balances or face a 30 percent penalty on these balances. In addition, account holders must report balances of more than $50,000 on their federal tax returns.