With the employer quarterly payroll tax return deadline looming, you may be looking for ways to ease your tax burden. The 2010 HIRE Act has several business-friendly tax provisions that may benefit you, including payroll tax provisions for qualified employees. In order to determine if your business qualifies to receive any of these benefits, ask yourself the following questions:

1. Did you recently hire or re-hire any employees?
2. Did they begin work after 2/3/2010?
3. Were they unemployed or employed for 40 hours or less during the 60-day period ending on the date their employment began?
4. Do you have a signed affidavit from the employee or can you get the employee to sign a Form W-11 that affirms question 3?
5. Are they not employed to replace another employee, unless the other employee separated from employment voluntarily or was terminated for cause?
6. Are they not family members of or related in certain other ways to the employer?

If you have answered yes to all of these questions, you may have an employee that could qualify for the HIRE ACT for which the employer receives a credit for the employer’s 6.2 percent share of social security tax on all wages paid to qualified employees from March 19, 2010 (the day after the date of enactment of the HIRE Act) through December 31, 2010. The employee’s 6.2 percent share of social security tax and the employer and employee’s shares of Medicare tax still apply to all wages. The payroll tax exemption is claimed on the employer’s quarterly federal payroll tax return. If you think you have employees that may qualify for this credit, give us a call so that we can discuss each one’s eligibility; there are a few circumstances that could disqualify them.

In addition to this payroll tax provision, the Act allows taxpayers to increase their business credit by the lesser of $1,000 or 6.2% of wages for a 52-week period for each retained worker that satisfies the minimum employment period. There are additional requirements that must be met in order to claim this credit, which may be claimed on the employer’s 2011 income tax return.

Since these provisions and restrictions are somewhat complicated, it would be a good idea to give us a call now to see if your business can take advantage of the hiring incentives included in this legislation.

Tucker and Company, P.C.
Certified Public Accountants