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.
