The new Jobs Bill (HIRE Act), signed by President Obama in March, allows employers to save on Social Security taxes by hiring qualified workers this year. If you hire qualified workers between February 2, 2010 and December 31, 2010, your business is eligible for a credit for the employer portion of Social Security taxes (6.2%) (part of FICA taxes). The employee portion of the Social Security tax must still be deducted from employee pay, and you still must pay the Medicare tax portion of FICA taxes and deduct Medicare taxes from employees.
Reporting Credits on Revised Form 941
The IRS is requiring employers to use Revised Form 941 for 2010 (PDF) to report payroll taxes, beginning with the second quarter of 2010 (April, May, June; due July 30). Using this form, you can tell the IRS if you hired qualified employees starting the second quarter of 2010. Read the instructions for Form 941 to learn more about the term "qualified employee" and see how to complete this form.
For More Information
Read more about how the Jobs Bill can save you taxes if you hire qualified employees.
