New Payroll Tax Holiday
Jan. 1, 2011
The new payroll tax holiday, created by the HIRE act is now in effect. The new law exempts employers from their share of Social Security taxes for unemployed workers hired after February 3, 2010. The IRS has developed a revised Form 941 for the second quarter of 2010.
Who is Eligible:
The payroll tax holiday is available to “qualified employers” that hire “qualified individuals.” A qualified employer is any employer other than a federal, state or local government. However, public colleges and universities are eligible.
A qualified individual is any individual who:
- Begins work after February 3, 2010 and before January 1, 2011 (It does not matter whether the work is full-time or part-time);
- Certifies by signed affidavit (under penalties of perjury ) (Form W-11, enclosed) that he or she was not employed more than 40 hours during the 60-day period prior to their hire date;
- Is not employed to replace another employee of the employer unless the other employee separated from employment voluntarily, or for cause or other circumstances; and
- Is not a related party of the employer.
Wages paid to a qualified individual after March 18, 2010 and before January 1, 2011 are exempt from the 6.2% employer’s share of the Social Security tax (but the employee’s share must still be withheld from wages).
If you have any questions, please feel free to call Squire & Company. 801-225-6900
Click here for a PDF of this article.
Click here for a W-11 HIRE Act Form.
