Disclaimer of Liability
The information in this e-newsletter is for general guidance only, and does not constitute the provision of legal advice, tax advice,
accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used
as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or
taking any action, you should consult a professional advisor who has been provided with all pertinent facts relevant to your particular
situation.
The author of the tax articles in this e-newsletter did not intend nor write the advice to be used to avoid any penalty imposed by a
taxing authority, nor may any user/recipient of this document use this document's written tax advice for that purpose. This document's
tax advice was written specifically to support the promotion or marketing of the transaction/matter addressed by the written tax advice.
Therefore, any user/recipient of this document should seek an independent tax professional's advice regarding the user/recipient's
particular circumstances.
The information is provided "as is" with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and
without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for
a particular purpose.
The information in this e-newsletter is for general guidance only, and does not constitute the provision of legal advice, tax advice,
accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used
as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or
taking any action, you should consult a professional advisor who has been provided with all pertinent facts relevant to your particular
situation.
The author of the tax articles in this e-newsletter did not intend nor write the advice to be used to avoid any penalty imposed by a
taxing authority, nor may any user/recipient of this document use this document's written tax advice for that purpose. This document's
tax advice was written specifically to support the promotion or marketing of the transaction/matter addressed by the written tax advice.
Therefore, any user/recipient of this document should seek an independent tax professional's advice regarding the user/recipient's
particular circumstances.
The information is provided "as is" with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and
without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for
a particular purpose.
| Serving the Central Pennsylvania area since 1981 |
| Robert A. Romako, CPA |
| Employers: Earn Tax Credits for Hiring the Unemployed |
Employers can receive forgiveness of employer matching Social Security taxes and earn a
special $1,000 tax credit for employee retention. These incentives are designed to spur hiring of
the unemployed and to keep them working. Here are the conditions you must meet to qualify for
the tax incentives:
• The employer’s Social Security match of 6.2% is forgiven for wages paid to new hires of
qualified individuals after March 18, 2010 and who begin work between February 3, 2010
and January 1, 2011.
• New hires are qualified if they were unemployed for 60 or more days before their start date.
Qualified employees generally may not displace other current employees with some
exceptions and may not be related to the employer or own a direct or indirect 50% interest
in the business.
• Employees must certify their eligibility as a qualified employee for this program in Form
W-11, “Hiring Incentives to Restore Employment Act Employee Affidavit,” issued on April 6
by the IRS.
• Employers may offset the forgiven tax amounts against payroll tax deposits for payments
due after April 1. If employees were eligible in the first quarter, the forgiveness can be
claimed in the second quarter.
If you retain the new employees for 52 consecutive weeks, you may claim an additional credit of
6.2% of the wages paid or $1,000, whichever is less. Also, the wages paid during the last 26
weeks of employment must be at least 80% of the wages paid during the first 26 weeks of the 52-
week qualifying period. Since 52 weeks must elapse before employers are eligible for this
retention incentive, it cannot apply for 2010 calendar-year filers but will be claimed in the 2011
tax year.
Here is the information you will need to supply to your tax preparer:
• Identification of eligible employees
• Date of hire
• Wages paid for first 26 weeks
• Wages paid for subsequent 26 weeks
Taken in combination, this means that $20,000 paid to a qualifying individual saves you as the
employer $1,240 in Social Security taxes, plus you can earn an additional $1,000 if you retain
them for 1 year! Don’t miss out on these valuable tax savings – be sure to contact me if you have
any questions.
special $1,000 tax credit for employee retention. These incentives are designed to spur hiring of
the unemployed and to keep them working. Here are the conditions you must meet to qualify for
the tax incentives:
• The employer’s Social Security match of 6.2% is forgiven for wages paid to new hires of
qualified individuals after March 18, 2010 and who begin work between February 3, 2010
and January 1, 2011.
• New hires are qualified if they were unemployed for 60 or more days before their start date.
Qualified employees generally may not displace other current employees with some
exceptions and may not be related to the employer or own a direct or indirect 50% interest
in the business.
• Employees must certify their eligibility as a qualified employee for this program in Form
W-11, “Hiring Incentives to Restore Employment Act Employee Affidavit,” issued on April 6
by the IRS.
• Employers may offset the forgiven tax amounts against payroll tax deposits for payments
due after April 1. If employees were eligible in the first quarter, the forgiveness can be
claimed in the second quarter.
If you retain the new employees for 52 consecutive weeks, you may claim an additional credit of
6.2% of the wages paid or $1,000, whichever is less. Also, the wages paid during the last 26
weeks of employment must be at least 80% of the wages paid during the first 26 weeks of the 52-
week qualifying period. Since 52 weeks must elapse before employers are eligible for this
retention incentive, it cannot apply for 2010 calendar-year filers but will be claimed in the 2011
tax year.
Here is the information you will need to supply to your tax preparer:
• Identification of eligible employees
• Date of hire
• Wages paid for first 26 weeks
• Wages paid for subsequent 26 weeks
Taken in combination, this means that $20,000 paid to a qualifying individual saves you as the
employer $1,240 in Social Security taxes, plus you can earn an additional $1,000 if you retain
them for 1 year! Don’t miss out on these valuable tax savings – be sure to contact me if you have
any questions.
| AUGUST 2010 NEWSLETTER ARTICLE |
| Robert A. Romako, CPA 220 Haldeman Avenue New Cumberland, PA 717.774.3047 |