The IRS has issued in draft form the “Hiring Incentives to Restore Employment (HIRE) Act Employee Affidavit” (“Form W-11”). This form can be used to confirm that an employee is a qualified employee under the HIRE Act. Employers and employees can use another similar statement if it contains the same information in Form W-11 and is signed under penalties of perjury.
Form W-11 contains a single statement: “I certify that I have been unemployed or have not worked for anyone more than 40 hours during the 60-day period ending on the date I began employment with this employer.” It also includes a space for the employee’s social security number and the name of the employer. Form W-11 also requires the employee to sign the form under the following statement: “Under penalties of perjury, I declare that I have examined this affidavit and, to the best of my knowledge and belief, it is true, correct, and complete.”
Nothing in the instructions to Form W-11 requires the employee to execute Form W-11 (or similar statement) before he or she begins work. It appears, therefore, that employees who begin work after February 3, 2010, can sign a Form W-11 (or similar statement), provided he or she meets the requirements of a “qualified employee.”
The instructions to Form W-11 define a “qualified employee” as an employee who:
- Begins employment with the employer after February 3, 2010, and before January 1, 2011;
- Certifies by signed affidavit, or similar statement under penalties of perjury, that he or she has not been employed for more than 40 hours during the 60-day period ending on the date the employee begins employment with the employer;
- Is not employed by the employer to replace another employee unless the other employee separated from employment voluntarily or for cause (including downsizing); and
- Is not related to the employer. An employee is related to the employer if he or she is the employer’s child or a descendent of the employer’s child, the employer’s sibling or stepsibling, the employer’s parent or an ancestor of the employer’s parent, the employer’s stepparent, the employer’s niece or nephew, the employer’s aunt or uncle, or the employer’s in-law. An employee is also related to the employer if he or she is related to anyone who owns more than 50% of the employer’s outstanding stock or capital and profits interest, or is the employer’s dependent or a dependent of anyone who owns more than 50% of the employer’s outstanding stock or capital and profits interest.
The draft Form W-11 can be viewed here.
The IRS has updated its website to include frequently asked questions about the payroll tax exemption and the business credit under the HIRE Act, but there is no indication from the IRS when it will finalize Form W-11. For more information on the HIRE Act, see HIRE Act Provides Tax Breaks for Hiring Unemployed Workers.