On Thursday, the House of Representatives voted 217 to 201 in favor of the Hiring Incentives to Restore Employment (HIRE) Act, the $15 billion jobs bill introduced by Sen. Majority Leader Harry Reid (D-NV) as an amendment (S. Amt. 3310) (pdf) to H.R. 2847, the more expansive jobs bill the House previously passed in December. The Senate cleared this scaled-down jobs bill last Wednesday by a 70-28 margin. Because the House intends to change the effective date of a tax provision in order to offset its cost, the Senate will once again need to approve the amended bill before it can be signed by the President.
The HIRE Act, among other things, exempts any employer that hires a worker who has been without full-time work for at least 60 days from paying the employer’s share of Social Security taxes on that worker for 2010, up to a maximum value of $6,621, or 6.2 percent of wages paid in 2010 up to the FICA wage cap of $106,800. As a result, the longer the previously unemployed worker is kept on the employer’s payroll, the greater the tax benefit. In addition, the Act provides a $1,000 income tax credit for every new employee retained for 52 weeks.
The bill also extends a provision in the American Recovery and Reinvestment Act (“ARRA” or “Stimulus Bill”) that permits small businesses to deduct up to $250,000 of the cost of qualifying capital investments in the year purchased, instead of expensing the property over time.
The measure contains other provisions, such as those extending certain National Highway Traffic Safety Administration, Federal Motor Carrier Safety Administration, and other public transportation programs.
The measure does not extend the 65 percent premium COBRA subsidy or the enhanced unemployment insurance benefits. Instead, the Senate is currently considering separate legislation – the $150 billion American Workers, State and Business Relief Act of 2010 (pdf) – that would extend the COBRA subsidy and unemployment insurance benefits through December 31, 2010, among other benefits. This bill was introduced as an amendment (S. Amt. 3336) in the nature of a substitute to the Tax Extender Act (H.R. 4213). A temporary extension of these measures was recently granted through the Temporary Extension Act of 2010, which was signed into law on Tuesday.
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