When an employee gets a paycheck, he or she is quick to notice the difference between gross pay and net pay – the bulk of which is usually due to Social Security and Medicare taxes totaling 7.65% of their gross wages.\u00a0 But what they don’t notice\u00a0is that their employer also has to pay 7.65% on these wages.<\/p>\n
Many business owners are hesitant to hire a new employee due to the heavy burden of payroll taxes.\u00a0 To combat this,\u00a0the government has passed a new law called the Hiring Incentives to Restore Employment (HIRE) Act.\u00a0 This act provides two new benefits to employers who hire workers who were previously unemployed or who were only working part time.<\/p>\n
The first benefit gives employers who hire qualified unemployed workers an exemption from paying Social Security taxes of 6.2% on wages paid to these workers after March 18th, 2010.\u00a0 Employers would still need to withhold the employee’s share of Social Security taxes, and both the employer and the employee will still pay Medicare taxes.\u00a0 The benefit\u00a0will not impact the employee’s future Social Security benefits.\u00a0<\/p>\n
The unemployed worker must be hired after Feb. 3rd, 2010 and before January 1, 2011 to qualify.\u00a0 Each qualified employee must also provide a statement certifying that he or she\u00a0worked no more than 40 hours during the\u00a060 days\u00a0prior to beginning work.\u00a0 The IRS is working to create a form that employees can use to make this statement.<\/p>\n
The second benefit is an additional business tax credit, up to $1,000 per qualified employee, that business may claim on their 2011 tax returns.\u00a0 The workers must be retained for at least a year to be eligible for the credit.<\/p>\n
These benefits are available to nearly all types of employers, with the exception of household employers.\u00a0 Additionally, family members and other relatives do not qualify for the payroll tax exemption.<\/p>\n
Employers will be able to claim the payroll tax benefit on the payroll taxes that they usually file with the IRS, beginning with the second quarter of 2010.\u00a0 The IRS is preparing revised forms that should be available soon.\u00a0<\/p>\n
Consult with your tax advisor to find out if you\u00a0qualify for these tax benefits.<\/p>\n
\u00a0<\/p>\n
Tawni Berg, CPA<\/a> When an employee gets a paycheck, he or she is quick to notice the difference between gross pay and net pay – the bulk of which is usually due to Social Security and Medicare taxes totaling 7.65% of their gross wages.\u00a0 But what they don’t notice\u00a0is that their employer also has to pay 7.65% on […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":""},"categories":[220],"tags":[],"class_list":{"0":"post-2900","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-payroll","7":"entry"},"_links":{"self":[{"href":"https:\/\/huddlestontaxcpas.com\/wp-json\/wp\/v2\/posts\/2900","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/huddlestontaxcpas.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/huddlestontaxcpas.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/huddlestontaxcpas.com\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/huddlestontaxcpas.com\/wp-json\/wp\/v2\/comments?post=2900"}],"version-history":[{"count":1,"href":"https:\/\/huddlestontaxcpas.com\/wp-json\/wp\/v2\/posts\/2900\/revisions"}],"predecessor-version":[{"id":4806,"href":"https:\/\/huddlestontaxcpas.com\/wp-json\/wp\/v2\/posts\/2900\/revisions\/4806"}],"wp:attachment":[{"href":"https:\/\/huddlestontaxcpas.com\/wp-json\/wp\/v2\/media?parent=2900"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/huddlestontaxcpas.com\/wp-json\/wp\/v2\/categories?post=2900"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/huddlestontaxcpas.com\/wp-json\/wp\/v2\/tags?post=2900"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
\nSeattle\/Bellevue Tax Accountants<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"