The HIRE Act and the Health Care Reform Acts

It is safe to say that March 2010 was an extremely busy month for the tax community as President Obama signed into law the Hiring Incentives to Restore Employment Act (“HIRE Act”) on March 18, and the Patient Protection and Affordable Care Act on March 23, as amended by the Health Care and Education Reconciliation Act (“Health Care Reform Acts”) on March 30. The new laws have several significant tax-related provisions that affect individual and business taxpayers including law firms, attorneys, their staff, and their clients. More than $18 billion in tax incentives and relief provisions are contained in the HIRE act and $400 billion in new taxes and changes are included in the Health Care Reform Acts. These acts cover areas such as a new method for abating payroll tax on certain new hires, a new tax credit for retaining qualified workers, a favorable expensing provision for various asset acquisitions, small business tax credits for purchasing group health coverage, codification of the economic substance doctrine, additional 2013 Medicare taxes on higher income taxpayers and their investment income, and penalties/taxes related to health insurance plans or the absence thereof. Here are some highlights.