Thursday, April 29, 2010

HIRE Act Form W-11 (Employee Affidavit) for New Hires

The second quarter of FY 2010 has significant indicators of employment opportunities. Organizations in different industries have begun recruitment of talented professionals who will partake in supporting their advancement. 

In addition, the HIRE Act signed by President Obama will support the business goals of employers. Subsequently, the concerted efforts of organizations which will take advantage of its provisions will be instrumental in diminishing the high percentile of unemployment nationally.

The IRS recently released  the Form W-11 (Employee Affidavit)  for New Hires who qualify under the HIRE Act

The HIRE (Hiring Incentives to Restore Employment) Act was signed by President Obama last March 18th 2010, designed to encourage employers to hire and retain new workers, it will provide employers to claim the Special  Payroll Tax Exemption that will be applicable to many newly hired workforce for the Year 2010.

"The new law requires that employers get 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 (Employee Affidavit) is the official form that will validate eligibility of the employee under Hire Act.  Without the signature of the newly hired employee on the Form, it will invalidate the claim of the employer for the Special Payroll Tax Exemption.

Employers must retain this document (Form W-11) on file for future verification. Please read the instruction at the bottom of the form on how to use  and comply when hiring an employee who may qualify under this law.

Who will qualify under this Law?
A “qualified employee” is an employee who:
• begins employment with you after February 3, 2010, and before January 1, 2011;
• certifies by signed affidavit, or similar statement under penalties of perjury, that he or she has not been employed for more than 40 hours during the 60-day period ending on the date the employee begins employment with you;
• is not employed by you to replace another employee unless the other employee separated from employment voluntarily or for cause (including downsizing);
It is also wise for a given organization to review the restriction provision of this law, where it identified organizations that cannot qualify for the Special  Payrol Tax Exemption.
The HIRE Act created two new tax benefits designed to encourage employers to hire and retain new workers. As a result, employers who hire unemployed workers this year (after Feb. 3, 2010, and before Jan. 1, 2011) may qualify for a 6.2-percent payroll tax incentive, in effect exempting them from the employer’s share of social security tax on wages paid to these workers after March 18. This reduction will have no effect on the employee’s future Social Security benefits, and employers would still need to withhold the employee’s 6.2-percent share of Social Security taxes, as well as income taxes. In addition, for each unemployed worker retained for at least a year, businesses may claim a new hire retention credit of up to $1,000 per worker when they file their 2011 income tax returns.

To learn more details about this new law "The HIRE Act" - please visit the website of the IRS.Gov

For any inquiries about additional information on HIRE Act Form W-11, please contact us at (650) 241-3207 or send us your email to:

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