U.S. Tax: Employer tax incentives, offshore account restrictions become law
President Obama on March 18 signed into law a $17.6 billion jobs-creation package that provides a payroll tax holiday for employers who hire displaced workers, boosts the current-year general business credit for employers who retain those workers, extends the increased small-business expensing limits under section 179, and expands the Build America Bonds program.
To pay for this tax relief, the Hiring Incentives to Restore Employment (HIRE) Act imposes new information reporting requirements, withholding requirements, and penalties to curb abuses of offshore financial accounts. It also delays the effective date of the worldwide interest allocation election until 2021, and modifies certain required estimated tax payments for corporations with assets of $1 billion or more.
Provisions that became effective immediately upon enactment include:
- Payroll tax forgiveness for businesses that hire unemployed workers (effective for wages paid after the date of enactment through December 31, 2021);
- An increase in the general business credit for businesses that retain certain workers hired in 2010 (effective for wages paid after the date of enactment);
- Expansion of the Build America Bond program (effective for bonds issued after the date of enactment); and
- Increases in certain required corporate estimated tax payments due in 2014, 2015, and 2019
The bill cleared the Senate on March 17 and the House of Representatives on March 4.