As part of the significant efforts made by Payroll Network on year end and compliance / regulatory changes, we would like to inform you about the recent Hiring Incentives to Restore Employment Act.

The Hiring Incentives to Restore Employment (HIRE) Act passed in Congress and was enacted into law on March 18, 2010.

The Hiring Incentives to Restore Employment (HIRE) Act will offer a credit of the 6.2 percent of the employer tax on qualified Social Security wages for the remainder of 2010 to businesses that hire qualified employees after February 3, 2010, and prior to January 1, 2011, who have been out of work for at least 60 days.  Additional requirements require the qualified employee to certify, by a signed affidavit, that they were not employed for more than 40 hours during the prior 60 day period ending on the date the employment began; is not related to the employer; and is not employed to replace another employee unless the former employee was separated voluntarily or for cause.

The expectation is that the credit would be reported on Form 941, which the IRS has indicated will be revised in the next few weeks. Eligible employers will be able to claim the credit on the revised employment tax form for the second quarter.
In 2011, an additional credit of $1,000 per employee can be taken for the general business tax credit, provided the employer retains the employee for at least 52 weeks at specified wage levels.

At Payroll Network, our Development team is in the process of creating tools to assist our clients in the identification of qualified employees, credit amounts and the required reporting.