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IRS Releases HIRE Act Employee Affidavit And Tax Return To Help Employers Get Payroll Tax Exemption For Hiring New Workers

  • By: David Rich
  • Published: September 2, 2023

In a recent post linked here, this author explained that the federal Hiring Incentives to Restore Employment Act (the “HIRE Act”), enacted March 18, 2010, offers employers monetary incentives to hire and keep new workers.  Among other things, the HIRE Act exempts an employer from paying the employer’s share of Social Security payroll taxes (6.2% of the first $108,000 of compensation) for wages paid to any new employee hired between February 3, 2010 and January 1, 2011, provided that the new employee (1) has not worked for anyone for the last 60 days and (2) is not retained by the employer to replace another worker, unless that other worker quit or was fired for cause.

The HIRE Act obligates the employer to obtain a signed affidavit from each new employee certifying, under penalties of perjury, that she or he has been unemployed throughout the 60 days before starting work or, in the alternative, that she or he worked a total of not over 40 hours during those 60 days.  In April 2010, the Internal Revenue Service (the “IRS”) issued a form of affidavit (Form W-11) that new workers can fill out to make the necessary certification.

Also in April 2010, the IRS clarified that rehired employees and recent graduates are among those whom an employer may hire to qualify for the HIRE Act’s above-described payroll tax exemption. Specifically, the IRS states that employer who terminates a worker and then, after a 60-day period, rehires that same worker may apply the payroll tax exemption to wages paid to that rehired worker.  Likewise, the IRS confirms that if an employer hires a recent graduate who has been in school for some or all of the 60 days before the beginning of her or his employment, the HIRE Act’s payroll tax exemption applies to wages paid to that recent graduate.  In other words, in order for an employer to qualify for the HIRE Act’s payroll tax exemption, the individual whom the employer hires need not have worked at, and lost, a prior job.

Also last month, the IRS specified and revised the tax form on which an employer claims the HIRE Act’s payroll tax exemption for wages paid to new employees. In particular, an employer claims the payroll tax exemption on Form 941, Employer’s Quarterly Federal Tax Return, beginning in the second quarter of 2010.

If your company seeks help or guidance on a labor or employment law issue and your company is in the borough of Manhattan area, call the Law Offices of David S. Rich, LLC at (347) 941-0760.

David Rich, Esq.

David Rich David S. Rich is the founding member of the Law Offices of David S. Rich, LLC,
a Manhattan Employment and Business Litigation Law Firm, in New
York City and in Englewood Cliffs, New Jersey...View Profile