H.I.R.E. Act

Two new tax benefits are now available to employers hiring workers who were previously unemployed or working less than 40 hours. These provisions are part of the Hiring Incentives to Restore Employment (HIRE) Act.

Does this apply to you as a PER client? YES it does!

SUMMARY: This legislation is an incentive for businesses to hire people who are currently unemployed. In return, employers will receive a credit for the employer portion of Social Security taxes (6.2%). In addition, employers’ may receive an additional credit on their next years tax return if the employee stays 52 or more weeks.

DETAILS: Employers who hire unemployed workers this year after February 3, 2010 and before
January 1, 2011 may qualify for a 6.2 % payroll tax incentive. This means employers will be relieved from paying the employer’s share of social security taxes on wages paid to these workers beginning April 1, 2010). Following are additional facts to be considered in defining a qualified employee:

Employee must have worked LESS than 40 hrs during the 60 days prior to hire date
Employee must not replace a current employee (unless that employee was separated from employment voluntarily or for cause.)
Employee must not be related to the employer or directly or indirectly own more than 50% of the business
Employee may be previously laid-off employee

On the back of this notice you will find a sample of the new Federal Form W-11 provided by the IRS. In order for you to claim HIRE Act benefits, you must verify that the new hire is a “qualified employee”, and have them complete and sign the Form W-11. PER will provide you with a supply of these forms through payroll delivery. Include the completed Form W-11 with current new hire paperwork and forward to PER through standard new hire procedures.

If you have a qualified employee or employees that you will receive the employer credit on Social Security taxes (6.2%), you will simply NOT be billed the employer social security portion when payroll is processed.

Please feel free to call our offices if you would like more information regarding the HIRE Act, or have any additional questions at 407-599-4990