One of our team members, Judy Griggs, did some research regarding the changes to the 2010 W-2’s and the impact of the HIRE Act. Below is an extract from an email to customers.
As most of you know, the HIRE Act (Hiring Incentives to Restore Employment), which became law on March 18, 2010, provides two new tax benefits to employers who hire the unemployed this year.
You can read about the details here: http://www.irs.gov/businesses/small/article/0,,id=220745,00.html. In addition, your outside CPA, tax accountant, or auditor can provide you with any other guidance that you need.
With respect to the impact on Microsoft Dynamics SL payroll, the bottom line is that, if an employer hires a person after February 3rd and before January 1st of next year who has been unemployed or has not worked for anyone for more than 40 hours for the 60-day period preceding their date of hire, the employer can reduce the employer’s FICA tax liability by the amount of FICA tax that was paid on behalf of the new employee. This means that you need to be able to identify those employees who are qualified and have signed a W-11 so that their FICA amounts can be identified and reported on the 941s for the remainder of this year and on the W-2s. Please note that this (the FICA refund) is also retroactive to March 19th so some of the FICA paid first quarter can be refunded in the second quarter.
The following is a link to a draft version of the 941 which will be finalized by the end of the second quarter and the new W-11 form which new hires will need to sign if they are qualified employees under the HIRE Act.
Microsoft has officially filed a bug report (#21283) in their system for the W-2 changes. We do not have a release date for the update from Microsoft. I am expecting that we need to be prepared to collect the information for the second quarter 941s without the updates to Microsoft Dynamics SL being in place.
10/5/2010 – Microsoft has posted an update. Click Here to see the updated blog article.
We will be providing updates as they become available. If you have questions or need assistance please email us at acumaticasupport@swktech.com.
