The Hiring Incentives to Restore Employment (HIRE) Act of 2010 is a law in the 111th United States Congress

111th United States Congress

The One Hundred Eleventh United States Congress was the meeting of the legislative branch of the United States federal government from January 3, 2009 until January 3, 2011. It began during the last two weeks of the George W. Bush administration, with the remainder spanning the first two years of...

 to provide payroll tax

Payroll tax

Payroll tax generally refers to two different kinds of similar taxes. The first kind is a tax that employers are required to withhold from employees' wages, also known as withholding tax, pay-as-you-earn tax , or pay-as-you-go tax...

 breaks and incentives for businesses to hire unemployed workers. Often characterized as a "jobs bill," the Democrats

Democratic Party (United States)

The Democratic Party is one of two major contemporary political parties in the United States, along with the Republican Party. The party's socially liberal and progressive platform is largely considered center-left in the U.S. political spectrum. The party has the lengthiest record of continuous...

 in Congress

United States Congress

The United States Congress is the bicameral legislature of the federal government of the United States, consisting of the Senate and the House of Representatives. The Congress meets in the United States Capitol in Washington, D.C....

 insist that it is only one piece of a broader job creation legislative agenda, along with the Travel Promotion Act

Travel Promotion Act of 2009

The Travel Promotion Act of 2009 is a law creating a Corporation for Travel Promotion in the United States and charge non-U.S. tourists staying fewer than 90 days in the United States with a fee of $10. The money collected from travelers will be spent for advertising to get tourists to visit the...

 and other bills.

Legislative history

The Senate

United States Senate

The United States Senate is the upper house of the bicameral legislature of the United States, and together with the United States House of Representatives comprises the United States Congress. The composition and powers of the Senate are established in Article One of the U.S. Constitution. Each...

 passed the bill on February 24, 2010 by a vote of 70-28. The House of Representatives

United States House of Representatives

The United States House of Representatives is one of the two Houses of the United States Congress, the bicameral legislature which also includes the Senate.The composition and powers of the House are established in Article One of the Constitution...

 followed on March 4, 2010, passing an amended version (in compliance with new pay-as-you-go rules

Statutory Pay-As-You-Go Act

The Statutory Pay-As-You-Go Act of 2010, Title I of , , enacted on February 12, 2010, is a public law passed during the 111th United States Congress and signed by President Barack Obama...

) by a vote of 217-201. On March 17, the Senate agreed to the House's amendment by a vote of 68-29, and sent the bill to President Barack Obama

Barack Obama

Barack Hussein Obama II is the 44th and current President of the United States. He is the first African American to hold the office. Obama previously served as a United States Senator from Illinois, from January 2005 until he resigned following his victory in the 2008 presidential election.Born in...

, who signed the bill on March 18, 2010.

Provisions

Employers are eligible for a payroll tax credit when the employer hires certain new employees after February 3, 2010, and before January 1, 2011. In order to take the payroll tax credit, the employee must have either been unemployed for at least 60 days prior to hire or worked fewer than 40 hours for another employer during the previous 60 days. Employers do not pay the employer portion of social security tax, which is 6.2 percent, on wages paid to eligible new hires. In addition, employers receive a general business income tax break if the employer continues to employ the new hire for at least 52 weeks. The tax break is the lesser of $1,000 or 6.2 percent of wages paid to the new employee during the 52-week period. Household employers are ineligible for both tax benefits, as are new employees who are related to the employer. Also ineligible are employees who earn more than $106,000 per year and employees who displace a current employee, unless the first employee resigned or was terminated for cause. Employers may claim the credit after an eligible employee signs a statement affirming their previous unemployed status, such as Form W-11.

The Act also extends the $250,000 deduction limit under Internal Revenue Code

Internal Revenue Code

The Internal Revenue Code is the domestic portion of Federal statutory tax law in the United States, published in various volumes of the United States Statutes at Large, and separately as Title 26 of the United States Code...

 section 179

Section 179 depreciation deduction

Section 179 of the United States Internal Revenue Code , allows a taxpayer to elect to deduct the cost of certain types of property on their income taxes as an expense, rather than requiring the cost of the property to be capitalized and depreciated...

through 2010, authorizes $20 billion for highway and transit projects, and makes reforms to municipal bonds.

Ostensibly to offset the costs of the Act, the new FATCA (Foreign Account Tax Compliance Act) was created. It will require foreign banks to find any American account holders and disclose their balances, receipts, and withdrawals to the IRS, or be subject to a 30-percent withholding tax on income from U.S. financial assets held by the banks. Owners of these foreign-held assets have to report them on tax returns if they are worth more than $50,000. Individuals who do not disclose these assets may be subject to a 40-percent penalty on the balance of the account in question. The Act also closes a tax loophole that investors had used to avoid paying any taxes on dividends by converting them into dividend equivalents.

,