Hiring Incentives to Restore Employment Act of 2010

Today, President Obama signed into law the Hiring Incentives to Restore Employment Act of 2010 to help businesses hire and retain new employees. A brief summary of the key provisions that we believe will affect you are listed below. As always, feel free to contact your RBZ professional with any questions.

Payroll Tax Forgiveness for Hiring Unemployed Workers

• Provides payroll tax forgiveness for employers hiring individuals who have been unemployed for at least 60 days, beginning Feb. 3, 2010, and ending Dec. 31, 2010.

Business Credit for Retention of Certain Newly Hired Individuals in 2010

• Gives an additional income tax credit up to $1,000 for employers, equal to 6.2 percent of paid wages for every new employee retained for 52 weeks.

Increase in Expensing of Certain Depreciable Business Assets

• Extends higher limits for Section 179 small business expensing through 2010, allowing small businesses to deduct up to $250,000 from taxable income, but the value is decreased by the amount by which the cost of qualifying property placed in service exceeds $800,000. (Same as in 2009)

Foreign Account Tax Compliance

• Imposes a 30 percent withholding penalty on foreign financial institutions that do not agree to disclose their U.S. account holders to the Internal Revenue Service;
• Requires taxpayers to disclose their foreign accounts on their U.S. tax returns;
• Increases the statute of limitations to six years for failure to report certain offshore transactions and income;
• Clarifies when a foreign trust is considered to have a U.S. beneficiary;
• Treats substitute dividend and dividend equivalent payments to foreign persons as dividends for purposes of U.S. withholding.

If you have any additional questions about the Hiring Incentives to Restore Employment Act, please contact your RBZ representative or other appropriate advisor. We would be glad to answer any questions you may have.

RBZ, LLP is one of the largest public accounting and strategic consulting firms in Los Angeles and has been providing tax services for over 34 years. We are located at 11755 Wilshire Blvd., Ninth Floor, Los Angeles, CA 90025.

Phone: 310.478.4148 | Fax: 310.312.0358 | Web site: www.rbz.com