HIRE Act Affects All Employers

Wednesday April 07, 2010

Today, the IRS released two new forms related to the Hiring Incentives to Restore Employment (HIRE) Act. The first, a draft of Form 941, will be filed by all employers to report payroll taxes for second quarter 2010. The Service expects to post the final form, with instructions, in May. The second, Form W-11, will serve as the affidavit of employers that their new hires meet the requirements for the tax incentives enacted by the HIRE Act. 

In order to qualify for the 6.2% tax incentive (in effect exempting them from the employer’s share of social security tax on wages paid to these workers after March 18), the employer must retain on file a statement from each eligible new hire, certifying under penalties of perjury, that he or she was unemployed during the 60 days before beginning work or, alternatively, worked fewer than a total of 40 hours for anyone during the 60-day period. The Form W-11 can serve this purpose.

The 6.2% incentive is available for new positions, or when a new employee fills a position from which the prior occupant left voluntarily or was fired for cause. 

This bulletin provides a general summary of recent legal developments. It is not intended to be and should not be relied upon as legal advice.

Related Information: For more information, see IRS Newswire number IR-2010-43 at www.irs.gov