| ign="center"> | | | | Qualified employees must work for a qualified. The |
| Washington, on March 18, 2010, passed a new law | | | | payroll tax exemption applies to workers hired to |
| the HIRE Act (Hiring Incentives to Restore | | | | replace an existing worker if that employee |
| Employment). The enactment of the HIRE Act allows | | | | voluntarily terminated their position or was released |
| employers to claim two tax benefits. The tax benefit | | | | for relevant causes. Employees previously laid off and |
| applies to workers hired after Feb. 3, 2010 but | | | | later rehired after a sixty day period or if employers |
| before Jan. 1, 2011. There is also a tax benefit for | | | | replace a laid off employee with a newly hired |
| employers if the newly hired worker is employed for | | | | employee, these new workers are qualified for the |
| at least a year. | | | | payroll tax exemption. |
| One payroll tax break involves the | | | | There is no minimum age relating to the HIRE Act. |
| employerâs 6.2% share of Social Security | | | | High school or college students do qualify the |
| tax. If the employer has a qualified employee the | | | | employer for the tax exemption. The sixty day |
| employer will be exempt from their 6.2% Social | | | | unemployment or part-time employment rule takes |
| Security tax through December 31, 2010. The benefit | | | | into account school attendance. In this case it is not |
| is allowed for wages paid March 19, 2010 through | | | | necessary that the individual was previously |
| December 31, 2010.The new law does not apply to | | | | employed and has lost his or her job to be a qualified |
| the employeeâs share of Social Security and | | | | employee. |
| Medicare or the employer portion of the Medicare | | | | For the employerâs Social Security payroll |
| withholding. | | | | tax exemption the employee is not required to have |
| The second payroll tax exemption (hire retention | | | | worked for any set number of hours, days or |
| credit) applies in the case of the newly hired worker | | | | weeks. Employers should remember to qualify for the |
| that retained for at least a year. Businesses may | | | | hire retention credit when they file their 2011 income |
| claim an additional general business tax credit, up to | | | | tax returns the worker is required to have been |
| $1,000 per worker, when they file their 2011 income | | | | employed for at least one year. The retention credit |
| tax returns. | | | | is worth up to $1,000.00. |
| Qualified employees consist of workers who begin | | | | Employees must certify by a signed affidavit, under |
| employment after February 3, 2010, and before | | | | penalties of perjury, that they have not been |
| January 1, 2011, who have been unemployed or | | | | employed for more than 40 hours during the 60-day |
| employed for less than 40 hours during the previous | | | | period ending on the date they started employment. |
| 60-day period. The 60-day period must be continuous | | | | The IRS plans to issue an affidavit which business |
| and can span both tax years 2009-2010. Family | | | | owners can use for this purpose. The IRS will also be |
| members of the employer are not considered | | | | updating the 2010 Form 941 to reflect the payroll tax |
| qualified employees. | | | | exemption for 2nd quarter 941 filing. |
| Qualified employees span a large pool of workers. | | | | |