Lizbits

Hiring Incentives to Restore Employment (HIRE) Act - Part II

How to implement the (HIRE) Act in QuickBooks:

1. Make sure that you have the most recent release of the tax table update. (To check, click on Employees  & Get Payroll Tax Table Updates.)
2. The following screen will hopefully say “You are using tax table version 21012.” 
3. If not, click on "Update."
4. Click on Employees, Payroll Setup.
5. Click on #3,  Employee Setup. (Two drop down boxes appear.)
6. Click on Employee List drop down box. (The Review Your Employee List appears.)
7. Highlight the qualified employee.
8. Click Edit.
9. Click "Next" 7 times until you get to the Federal Information screen.You should now see a “HIRE Act Exemption” Check Box.
10. Click on the down arrow to the right and select “Qualified Employee”   If the employee doesn’t qualify, it will tell you (based on the hire date info which can be changed.)   If it’s OK, click "Next" and "Finish" to save the change.

Understanding the Hiring Incentives to Restore Employment (HIRE) Act

Lately We've been getting questions about the Hiring Incentives to Restore Employment (HIRE) Act.

There are two separate tax benefits to employers:

1) Employers get an exemption from the employer's 6.2 percent share of social security on wages paid to QUALIFYING EMPLOYEES, (see the second faq,pdf link below for a definition), effective for wages paid from March 19, 2010 through December 31, 2010.

2) In addition, for each qualified employee retained for at least 52 consecutive weeks, businesses will also be eligible for a general business tax credit, referred to as the new hire retention credit, of 6.2 percent of wages paid to the qualified employee over the 52 week period, up to a maximum credit of $1,000.

Like all government programs, there is paperwork galore. The employer needs to get a signed statement (Yes, Matilda, there's a form for that called a W-11 http://www.irs.gov/pub/irs-pdf/fw11.pdf ) from each eligible new hire certifying under penalties of perjury, that he or she was not employed for more than 40 hours during the 60 days before beginning employment with that employer.

As you might imagine this act has generated a ton of questions: For answers to some, see the following document: http://www.paychex.com/pdf/www/hireact/hire_act_faq.pdf

For answers to the rest, we highly recommend that you consult with your own tax professional.