Payroll Solutions Updates

Hiring Incentives to Restore Employment Act (HIRE)

Thu, 01 Apr 2010 10:33:09 -0400

On March 18, 2010, President Obama signed the new Hiring Incentives to Restore Employment Act (HIRE) into law. This federal legislation creates brand-new tax breaks for hiring and retaining unemployed workers.

Employers will get a “Payroll Tax Holiday” for new hires and a potential tax credit bonus.

Normally, an employer is required to pay its share of Social Security taxes on wages earned by employees. For 2010, the portion of the tax is 6.2 percent on the first $106,800 of wages.

Under the HIRE Act, an employer is effectively excused from paying its share of the 6.2 percent tax on wages received by "qualified employees." This exemption applies to wages paid after the date of enactment through the end of 2010. The maximum value for each qualified employee is $6,621.

For example, if a qualified employee is hired in March and receives $50,000 in wages in 2010, the employer saves $3,100 (6.2 percent of $50,000) in Social Security tax.

The new law defines a "qualified employee" as someone who meets all of these criteria:

Begins work after February 3, 2010 and before January 1, 2011.
Has not been employed for more than 40 hours during the previous 60 days (ending on the start date).
Was not hired to replace another employee unless the former employee separated from employment voluntarily or for cause.
Is not related to the employer and does not own more than 50 percent of the business, either directly or indirectly.

A qualified employee may be either a full-time employee or a part-time employee. There is no minimum requirement for the hours worked. The payroll tax forgiveness does not apply to the 1.45 percent Medicare portion of payroll tax. Household employers (for example, hiring nannies) cannot claim the new tax benefit.

The exemption officially begins with wages paid in the second calendar quarter of 2010. Employers entitled to tax relief for the first quarter will be credited against their general Social Security liability for the second quarter.

In addition to the payroll tax forgiveness, an employer can claim a tax credit if it retains a qualified worker for a minimum of 52 consecutive weeks. The credit is equal to the lesser of: $1,000 or 6.2 percent of the employee's wages paid during the 52-week period. If the employee quits or is fired before the end of the one-year period, no credit is allowed.

Please click the following links for more information directly from the IRS:

New Incentives for Hiring - New tax benefits aid employers who hire and retain unemployed workers.

Questions? We Have Answers - Our Q&As will help you understand the details of the HIRE tax breaks.

The HIRE Act - The language of the Act itself contains additional information for you.

Please click the link below to open a draft of the new HIRE Employee Affidavit. This form will be permanently added to our forms page as soon as the final draft is released.

Form W-11

2009 W-2 Forms Posted to Web Employee Portals

Tue, 08 Dec 2009 09:41:36 -0500

The 2009 Form W-2 Wage and Tax Statements have now been posted to all Web Employee portals. If your employees are unable to view their W-2 Form please contact us immediately.

Web Employee is an employee self-service package where your employees can change their address, change tax exemption information, view year-to-date information, view periodic check stubs and view W-2 information. All of this information can be printed by each employee as well.

Payroll Solutions Announces New Platform of Services

Tue, 20 Oct 2009 14:27:37 -0400

Our clients have spoken and we have taken note. Beginning in 2010 we will be offering a complete additional tier of payroll processing services. We now can provide a “real-time” solution to accessing payroll data. By continuously investigating and seeking out what small business owners require, we added this additional tier. This new platform offers many new features to the Payroll Solutions portfolio of services.

Click Here to view the new offers from our Advanced package offers.

We are excited about the addition of this new platform and we feel that this will give the clients exactly what they have been demanding.

Social Security Wage Base to Remain the Same in 2010

Tue, 20 Oct 2009 14:27:56 -0400

The taxable wage base for Social Security taxes will not increase in 2010, marking the first time since COLA increases were implemented in 1975 that this has occurred.

Additionally, Social Security benefits levels will also remain the same for 2010.

With a $106,800 Social Security wage base, the maximum Social Security tax per employee is $6,621.60. The employer matches the employee's Social Security taxes.

Payroll Solutions Releases 2010 Calendar

Wed, 11 Nov 2009 14:39:45 -0500

Please take special note of Federal Banking Holidays. Please contact your payroll analyst if you have any questions concerning the calendar.

Click Here to open and print a pdf version of the calendar.