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Impact of HIRE Act on CPAs

How to estimate possible savings for your clients.

May 10, 2010
Paychex Inc., Compliance and Marketing Divisions

With two key pieces of legislation recently signed into law, there are many unanswered questions. Paychex is closely monitoring these for the most up-to-date information to help your clients stay informed and compliant with this new legislation, accurately prepare payroll and maximize their tax credits.

Following are some of the known details:

HIRE Act — “Jobs Bill”

The key provisions of this bill include:

  • Eliminating the 6.2 percent employer social security tax on eligible hires.

  • A one-time business tax credit for retaining eligible employees for 52 consecutive weeks.

The following information is known from the Internal Revenue Service (IRS) up to this point:

  • The credit is for eligible employees hired after February 3, 2010 but only wages paid between March 19, 2010 and December 31, 2010 are eligible.

  • A new Form 941 will be updated to account for the tax credits beginning with the second quarter form. First quarter wages and credits will also be reported on the second quarter form.

  • Employers can reduce their federal deposit amounts throughout the quarter by the eligible employer social security tax amount or they can wait to claim the credit on their Form 941 return.

  • There will be a standard affidavit for employers to use for eligible employees, IRS Form W-11, Hiring Incentives to Restore Employment (HIRE) Act Employee Affidavit. Employers may create their own version as long as it has identical wording as the IRS version. The attestation should be retained by the employer for possible future audit and not filed with the IRS.

For tools including our HIRE Act Savings Calculator to estimate the possible savings for your clients and a customizable letter to communicate this legislation, please visit www.paychex.com/hireact.

Healthcare Reform

The Paychex Insurance Agency is closely following the provisions of the healthcare bill. Some elements of the bill are slated to take effect within the next year, while others will take some time to implement.

We will provide information and assistance well before the various elements of the final legislation go into effect. You can count on Paychex to help you and your clients prepare for future changes in legislation.

Visit our dedicated Web page at www.paychex.com/regulations, for all details on both pieces of legislation, as they become available.

Paychex is proud to be the exclusive provider of retirement services for the firm-based AICPA Member Retirement Program, and preferred provider of payroll and retirement plan services for CPAs through the AICPA Business Solutions Partner Program.