Internal Revenue Service Posts HIRE Act Forms

The IRS has posted the form on its Web site that businesses can use to claim a payroll tax exemption for hiring new employees under the HIRE Act.

Form 941, Employer’s Quarterly Federal Tax Return, is to be filed by most businesses claiming the payroll tax exemption for wages paid to qualified employees.

The Hiring Incentives to Restore Employment Act was created to encourage employers to hire and retain new workers by creating a payroll tax exemption and the related new hire retention credit.

The HIRE Act requires that employers get a signed statement from each eligible new hire, certifying that he was not employed for more than 40 hours during the 60 days before beginning employment with that employer.

The new tax benefits are especially helpful to employers who are adding positions to their payrolls. New hires filling existing positions also qualify as long as they are replacing workers who left voluntarily or who were terminated for cause and otherwise are qualified employees. Family members and other relatives do not qualify for either of these tax benefits.

Businesses, agricultural employers, tax-exempt organizations, tribal governments, and public colleges and universities all qualify to claim the payroll tax exemption for eligible newly hired employees. Household employers and federal, state and local government employers, other than public colleges and universities, are not eligible.