The HIRE Act Brings Big Payroll Changes To Employers and Creates More Forms For Payroll.
Here’s what you need to know:
The HIRE Act offers employers temporary payroll tax breaks for hiring previously unemployed individuals and a business tax credit for retaining qualified individuals at least 52 weeks. The benefits can be substantial: up to $6,621 in payroll tax credits and up to $1,000 in business tax credit per eligible employee.
Reduced Social Security Taxes for Employers: Qualified employers receive a temporary payroll tax holiday from the 6.2 percent Social Security payroll tax on qualified individuals.
- The credit applies to wages earned from the date of enactment through December 31, 2010 for each new qualified individual hired after February 3, 2010 and through December 31, 2010.
- The maximum value of the credit would be equal to 6.2% of wages up to the FICA wage cap ($106,800) or $6,621.60 per qualified individual.
- A qualified individual “certifies by signed affidavit, under penalties of perjury, that such individual has not been employed for more than 40 hours during the 60-day period ending on the date such individual begins such employment.”
Business Tax Credit: Additionally, businesses are eligible for a $1,000 business tax credit for each qualified individual retained at least a year (52 consecutive weeks). The individual’s wages during the last 26 weeks must be at least 80 percent of the wages paid during the first 26 weeks of employment. The tax credit would be claimed on the 2011 business income tax return.
Click HERE to download the new form W-11, HIRE Employee Affidavit.
Click HERE to visit the IRS website for more details.
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