The Hire Act passed earlier this year provides for two tax breaks for hiring previously unemployed workers. The tax breaks are a reduction in the Social Security tax and a tax credit if the new hire is employed for at least a year.
The first tax break is a payroll tax exemption. The employer does not have to pay the 6.2% social security tax on the qualified employee’s wages from March 19,2010 through December 31, 2010.
The second tax break applies to qualified employees who are employed for at least 52 weeks. The employer can claim a business tax credit for 6.2% of the employee’s wages for the first 52 weeks up to a maximum of $1,000. The new employee’s wages in the second six months of the year must be at least 80% of his wages in the first six months.
A qualified employee is defined as someone who has worked fewer than 40 hours in the last 60 days.
As with any tax law, there are a number of qualifications that you should be aware of. There is a series of pages that should answer most questions about how this works including the forms you need to file to claim your benefits.
http://www.irs.gov/businesses/small/article/0,,id=220746,00.html