Granite Payroll Associates Inc

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Hiring Incentives to Restore Employment (HIRE) Act

An employer seeking to benefit from the HIRE Acts payroll tax holiday or retention tax credit must have employees complete form W-11 or a similar form to attest that they began employment after February 3, 2010, and before January 1, 2011; have not been employed for more than 40 hours during the 60-day period ending on the date they begin employment with the employer seeking the HIRE Act benefits; are not being employed to replace another employee unless the other employee separated from employment voluntarily or for cause (including downsizing); and are not related to the employer seeking the tax benefit.

Payroll Tax Holiday
The holiday allows employers to skip matching the Social Security portion of FICA for qualifying employees. Employers and employees are normally required to pay 6.2% on the first $106,800 of wages in each calendar year.
This incentive could save employers up to $6,621.60 for each qualified employee. That amount could be even higher for qualified veterans, whose Social Security withholding maximum is higher.

If a qualifying employee continues to be (1) employed for 52 consecutive weeks and (2) receive wages during the last 26 weeks that are at least 80% of the wages during the first 26 weeks, the employer may be eligible for a one-time business credit. Generally, the credit is the lesser of $1,000 or 6.2% of wages paid to the employee for those 52 weeks.

Call GPA to obtain Form W-11 or to discuss this new incentive.