IRS provides further information on payroll form changes due to new HIRE Act legislation
IRS Teleconference 4/1/2010
The “Hiring Incentives to Restore Employment Act” (HIRE Act, PL 111-147) encourages companies to hire unemployed workers by exempting certain wages from Social Security taxes (payroll tax exemption), and by providing employers with a business tax credit if new hires are retained for at least 52 consecutive weeks. There will be changes to several tax forms as a result of the legislation.
The IRS provided an update on those changes in an April 1 payroll industry teleconference call.
Form 941. The IRS will be revising the second quarter Form 941, Employer’s Quarterly Federal Tax Return, due on Aug. 2, 2010. The IRS expects to finalize the new version on April 6.
The electronic specifications for the form will be revised at a later date. A draft version of the form included a new line to report tip adjustments. That line will not be included in the final version of the form. The IRS expects to include the tip adjustment line on the 2011 Form 941.
Form W-11. An employer may not claim the payroll tax exemption unless the new hire certifies by signed affidavit (under penalties of perjury) that he was employed for a total of 40 hours or less during the 60-day period ending on the date the employment begins.
The IRS has drafted Form W-11, Hiring Incentives to Restore Employment (HIRE) Act Employee Affidavit, to help employers meet this requirement. http://www.irs.gov/pub/irs-pdf/fw11.pdf
The form does not need to be notarized. The IRS expects employees to be able to sign the form electronically at some point.
Form W-2/W-3. There will be a new code on box 12 of the 2010 Form W-2 (Code CC) to indicate that a new hire had wages that qualified for the payroll tax exemption. Form W-3, Transmittal of Wage and Tax Statements, will be revised to include a line for total aggregate exempt wages.
Source: WG&L Accounting & Compliance Alert Checkpoint 4/2/2010
Under the W-11 paragraph, if I understand correctly then it should state that the employee was NOT employed for more than 40 hours a week in the past 60 days in order for the employer to be exempt. Correct?
I see your question. In the W-11 itself, the “not worked for more than 40 hours” is stated in the negative whereas in the explanatory W-11 paragraph in the blog, it is stated in the positive as “work a total of 40 hours or less”.