"New Hire Reporting for 941 Filing and Retention Credit"

We are excited that most of our clients are now on the new CMSS upgrade plan which incorporates new software changes as they are rolled out.   For those of you who utilize the payroll module, a new report has been added under Periodic Processing / Quarterly Processing.  

This new report, "Hire Act Reporting" (PR-05-04-09), should be used when filling your 2010 941 Report and required only if you have employees who meet the qualifications to receive the New Hire tax incentive. Read the below information for more info concerning the New Hire Act.

Two New Benefits for Employers that Hire and Retain Recently Unemployed

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. In addition, for each qualified employee retained for at least a year whose wages did not significantly decrease in the second half of the year, businesses may claim a new hire retention credit of up to $1,000 per worker on their income tax return.

These tax benefits are especially helpful to employers who are adding positions to their payrolls. New hires filling existing positions also qualify but only if the workers they are replacing left voluntarily or for cause. Family members and other relatives generally do not qualify.

Employers must get a signed statement from each eligible new hire, certifying under penalties of perjury, that he or she was not employed for more than 40 hours during the 60 days before beginning employment with that employer. IRS Form W-11 can be used to meet this requirement. Further details, including answers to frequently asked questions, are posted on IRS.gov.

NOTE: New W2 Reporting is required if you plan to take advantage of the New Hire Tax Credit. W2 and 1099 (if any are required) will be available for REV15 and CMSS only.

Implementation Notes:

• To use this feature you must flag each qualified employee in field 36 of the employee record (PR0701 field #36 - Qualified? Hire Act)

• For the Second quarter 941 filing - run the New Hire Report (PR050409) for the date range of March 19 - March 31st to gather the totals for March 19 - March 31. 12C: The number of qualified employees and 12D: exempt wages/tips.

• For the 2nd - 4th Quarter - run the New Hire Report (PR050409) for the quarter start and ending dates to gather the totals for (6a): # Of Qualified Employees hired during that quarter, (6b) for total # of qualified employees paid in that quarter and (6d): Total Exempt wages.  NOTE: This report will also calculate the GL distributions so that you can manually adjust the liability and expense accounts when you process your 941 payment.

  SouthWare's Revision 15 and above is compatible with Windows7.