Two New Tax Benefits for Employers who Hire & Retain Unemployed Workers

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Two new tax benefits are now available to employers hiring workers who were previously unemployed or only working part time. These provisions are part of the Hiring Incentives to Restore Employment (HIRE) Act enacted into law today.

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 their share of Social Security taxes on wages paid to these workers after March 18, 2010. This reduced tax withholding will have no effect on the employee’s future Social Security benefits, and employers would still need to withhold the employee’s 6.2-percent share of Social Security taxes, as well as income taxes. The employer and employee’s shares of Medicare taxes would also still apply to these wages.

In addition, for each worker retained for at least a year, businesses may claim an additional general business tax credit, up to $1,000 per worker, when they file their 2011 income tax returns.

The two 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 do not qualify.

In addition, the new law requires that the employer get a statement from each eligible new hire certifying that he or she was unemployed during the 60 days before beginning work or, alternatively, worked fewer than a total of 40 hours for someone else during the 60-day period. The IRS is currently developing a form employees can use to make the required statement.

Businesses, agricultural employers, tax-exempt organizations and public colleges and universities all qualify to claim the payroll tax benefit for eligible newly-hired employees. Household employers cannot claim this new tax benefit.

Employers claim the payroll tax benefit on the federal employment tax return they file, usually quarterly, with the IRS. Eligible employers will be able to claim the new tax incentive on their revised employment tax form for the second quarter of 2010. Revised forms and further details on these two new tax provisions will be posted on IRS.gov during the next few weeks.


http://www.irs.gov/newsroom/article/0,,id=220326,00.html

Do You Know Anyone Who Has Been Laid Off During The Last Three Years?

Immediate action may be necessary to secure refunds of Social Security taxes for 2006.

A District Court Case recently held that severance payments made by a bankrupt retailer to employees were not subject to Social Security taxes. While there is a good likelihood that the IRS will appeal since they won an Appeals Court case in 2008, companies should consider filing protective refund claims citing this new decision. It is critical if this issue applied in 2006 to file a protective claim immediately since the statute of limitations generally expires three years after the due date of tax returns. With a protective claim for refund, the IRS holds the claim until the case is ultimately decided. If the IRS ultimately loses its appeal, it will be required to honor the protective refund claim.

Severance payments refunds may also be available for 2007 and 2008, and you will need to take this new case into consideration for 2009.

Those affected should contact the company that laid them off to see if they are filing for the potential refunds.


Julie Welch, CPA, CFP
Meara Welch Browne, P.C.
julie@meara.com
816-561-6868

What do you think of the St. Louis Globe Democrat?

It's back! The St.Louis Globe Democrat died as a daily newspaper October 29, 1986 at the age of 134, leaving St. Louis as a one-paper town. It has been resurrected and has just finished its first week back as an online-only newspaper.

Publisher Dan Rositano has 16 fulltime staffers and about 20 contributors. He says he’s amazed at the consumer response in the first week.

Check it out:
http://www.globe-democrat.com/

What do you think?

Can Accountants Be Effective Leaders?

The current recessionary climate has thrust CFOs into the spotlight and made one thing abundantly clear: U.S. companies are in dire need of financial leadership.

And, although for many financial professionals the idea of achieving financial leadership is a clear and realistic goal, few understand the skills necessary to become a true leader.

Business Finance Magazine explores the leadership skills accountants should focus on to become more valuable to their companies and firms.

http://businessfinancemag.com/article/leadership-skills-continuum-1130

St. Louis Business Journal Writes That Missourians Feel Better About Economy

Do you agree that the economy is turning around?

This is the topic of a blog posting by Kelsy Volkmann. She writes:

"This holiday season, Missourians are feeling cheerier about the economy, their jobs and their wallets, a new survey shows.

Fears about the recession are slowly subsiding, with more than half of Missourians surveyed by accounting firm Deloitte saying they expect the economy will improve in 2010.

Nearly nine in 10 (87 percent) believe their jobs are secure compared with 81 percent nationwide, Deloitte found, unlike our own unscientific poll this month of St. Louis Business Journal readers who said they felt less secure."

What do you think?

http://stlouis.bizjournals.com/stlouis/blog/2009/11/missourians_feel_cheerier_about_economy.html

It's That Time of Year!

The holidays represent a lot for all of us, but for many CPAs, it means something in addition to all the festivity--tax season is coming.

To help assist our tax practitioners ramp up their staffs for the 2009 tax season, MSCPA is offering you the opportunities to post your part-time tax assistance openings for FREE on the MSCPA Career Center.

Your postings will be promoted to MSCPA’s nearly 9,000 CPA members throughout Missouri. Interested applicants will then apply directly to your postings online.

To post your FREE part-time opportunity, scroll down to the last package:
http://careers.mocpa.org/rates.cfm

Does Social Media Make Your Smarter?

A study published by global think tank, the Human Capital Institute (HCI), revealed that over half of all organizations are experimenting with communities of practice for business purposes, along with other popular applications such as social networks (49%), blogs and/or wikis (39%).

According to the third annual Deloitte LLP Ethics & Workplace survey published earlier this year, 60% of business executives believe they have a right to know how employees portray themselves and their organizations in online social networks and 74% believe social networks make it easier to damage a company's reputation.

However, 53% of employees (and 63% of 18 to 34 year olds) say their social networking pages are not an employer's concern.

More here:
http://www.accountingweb.com/topic/cfo/can-facebook-make-you-better-learner