IRS to Issue Hire Act Final Form W-11 Week of April 5

April 2, 2010

The IRS will issue the final version of Form W-11, “Hiring Incentives to Restore Employment (HIRE) Act Affidavit,” and a revised second quarter Form 941, “Employers Quarterly Federal Tax Return,” during the week of April 5, according to an IRS official. The IRS issued a draft Form W-11 on March 31. See “IRS Issues Draft Form to Certify Qualified Employees Under HIRE Act.”

On March 18, 2010, President Obama signed the Hiring Incentives to Restore Employment Act into law, providing tax incentives for businesses hiring unemployed workers and extending hiring deduction limits for small businesses that make capital improvements. See “HIRE Act Provides Tax Breaks for Hiring Unemployed Workers.”

In addition to the new Form W-11, the 2010 Forms W-2 and W-3 will be revised to show that the employee had wages that exempted the employer from having to pay the employer portion of the old-age, survivor, and disability insurance portion (6.2%) of the FICA tax.

Employers will not take into account any first quarter exempt wage amounts accumulated from March 19 through March 31 on the first quarter Forms 941 due April 30, according to the IRS official. Rather, these amounts will be treated as a payment made on the first day of the second quarter on the revised Form 941 – as is done with the current COBRA subsidy tax credit. For the following quarters, employers will report total amounts on the first page of Form 941, and reduce the liability on Schedule B of Form 941 by the amount of the tax reduction.

The IRS also plans on posting a new set of questions and answers to its website during the week of April 5 that will address certain issues regarding the HIRE Act provisions.