President Obama signed the Hiring Incentives to Restore Employment (HIRE) Act (aka Jobs Bill) into law on Thursday, March 18, 2010. The HIRE Act is focused on accelerating the hiring of unemployed workers. This means if you hire unemployed workers this year (after February 3, 2010 and through December 31, 2010) you may qualify for an immediate 6.2% payroll tax incentive, in effect exempting you from your share of Social Security taxes on wages paid to these workers after March 18, 2010 (through December 31, 2010). To Receive Your Immediate 6.2% Social Security Exemption Credit (Payroll Tax Incentive)
1. Let us know which of your new hires is eligible for the Social Security Exemption credit. An employee is eligible if he/she:
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- Begins employment between February 3, 2010 and December 31, 2010. Additionally, only the wages earned with a check date of March 19, 2010 to December 31, 2010 are eligible for the credit.
- Has not been employed for more than 40 hours during the previous 60 days. The individual must sign an affidavit (Form W-11) attesting to the employer this fact.
- Is not hired to replace another employee unless the previous employee was separated from employment voluntarily or for cause. Additional restrictions may apply for seasonal employment. Details can be found at www.IRS.gov.
2. The Payroll Department, Inc. calculates the Social Security Exemption credit and adjusts your 941 payment. You will see the detail of the credit calculation on the Payroll Journal that will be provided with every payroll processed.
If you have eligible employees who were hired after February 3, 2010 AND received wages with a check date March 19, 2010 to March 31, 2010 please contact your payroll specialist. The Payroll Department, Inc. will process an adjustment payroll run to apply your Social Security Exemption credit.
