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Hire Act
The IRS has recently passed the HIRE act which gives employers tax breaks
for hiring previously unemployed workers.
If you hire a new employee and he/she has been unemployed for 60 days prior
to being hired by your company, you are exempt from paying your share of the
social security taxes on wages paid to these workers (6.2%). We claim this
Exemption when we file the 941 taxes starting in the 2nd quarter.
The only record-keeping requirement is form W-11 which is a certification by
the employee that he/she has been unemployed for the previous 60 days. Keep
this form along with the W-4’s in your payroll records.
The HIRE act is effective February 3, 2010 until December 31, 2010. It does
not include wages paid to an employee who is hired to replace an existing
worker unless the existing worker terminated employment voluntarily or was
terminated for cause.
The HIRE act does pertain to wages paid to rehired workers as long as they
were laid off for the previous 60 days.
The HIRE act also allows an employer to claim an additional income tax
credit at the end of the year of up to $1,000. That is equal to 6.2% of paid
wages for every qualified new employee retained for 52 weeks.
Feel free to call us if you have any questions.
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