On March 18, 2010, The HIRE Act was signed into law and provides some incentives for hiring and retaining previously unemployed workers.
An exemption was available on the 2010 2nd, 3rd, and 4th quarter form 941 payroll tax reports for payroll paid to new employees who were qualified previously employed workers.
In effect for the 2011 tax year, a credit is available to employers who retain qualified employees for 52 consecutive weeks. The credit is claimed on the employers’ income tax return and is the lesser of $1,000 or 6.2% of wages paid to the qualified employee during the 52 week period. A qualifying employee’s wages for the last 26 weeks of the period must be at least 80% of the employee’s wages for the first 26 weeks of the period. The qualifying employee must have been hired between February 3rd, 2010 and December 31, 2010. The credit is available in addition to any exemptions claimed on the 2010 form 941 payroll tax reports.
Should you have questions regarding this post or any other tax needs, contact us at Schutte & Hilgendorf, PLLC, Prescott accountants serving the greater Yavapai County with tax, accounting, auditing, and QuickBooks consulting expertise.
The Federal Unemployment Tax (FUTA) rate was reduced from 6.2% to 6.0% effective July 1, 2011. This makes all employers who are subject to Arizona unemployment insurance tax also subject to the .10% Arizona Job Training Tax (JTT) on taxable wages paid after June 30, 2011.
Consequently, the above-mentioned JTT exemptions for certain tax-rated employers expired on July 1, 2011, so those exemptions are no longer in effect with respect to taxable wages that are paid after June 30, 2011. Therefore, ALL tax-rated employers, regardless of their UI Tax rate and whether they are “new employers” or experience-rated, are subject to JTT on taxable wages they pay after June 30, 2011.
Employers who were exempt from JTT in the first and second quarters of 2011 continue to be exempt from JTT on taxable wages they paid in those quarters. In other words, for 2011: (1) if such an employer did not meet the $7,000 taxable wage base of an employee in the first or second quarter, the employer is subject to JTT only on taxable wages paid to that employee in the third and fourth quarter; (2) if the employer did meet the taxable wage base of an employee in the first or second quarter, the employer is not subject to JTT on wages paid to that employee in the third or fourth quarter. Reimbursement employers continue to be exempt from JTT after June 30, 2011.
From Arizona Department of Economic Security Change in FUTA Rate and Job Training Tax Exemptions
If you need more information about the article above, contact Schutte & Hilgendorf, CPAs serving all of Yavapai County with accounting, tax preparation and planning, auditing, bookkeeping, payroll, and QuickBooks consulting.
On March 18, 2010, The HIRE Act was signed into law and provides some incentives for hiring and retaining previously unemployed workers.
Under the HIRE Act, employers who hire unemployed workers after February 3, 2010 and before January 1, 2011 are exempt from having to pay the employers share of Social Security taxes(6.2%) on the wages paid to the qualified employees after the March 18th effective date. The employer still withholds and pays the employee share of Social Security tax(6.2%) and both the employee and employer share of Medicare tax(1.45%).
Qualifying employees are those who certify to the employer on new Form W-11 that they did not work more than 40 hours in the 60 days prior to the hire date. If the new hire is replacing another worker, the exemption applies only if the worker left voluntarily or was fired for cause.
The credit is obtained by filing the new Form 941 for the 2nd quarter payroll tax reporting.
One additional credit will be available if the qualifying employee is retained for at least 52 consecutive weeks. The retention credit is taken in 2011 and will be the lesser of $1,000 or 6.2% of the wages paid to the worker during a 52 consecutive-week period.
If you need further information please contact us.
Should you have questions regarding this post or any other tax needs, contact us at Schutte & Hilgendorf, PLLC, Prescott accountants serving the greater Yavapai County with tax, accounting, auditing, and QuickBooks consulting expertise.
