BUSINESS TAX FILERS CAN CLAIM HIRE ACT RETENTION CREDIT BY APRIL 17TH
Posted by Kirsten Meyer on Tue, Feb 07, 2012 @ 11:34 AM
Calendar year business tax filers are able for the first time to claim the retention credit portion of the HIRE Act when they file their 2011 tax returns before April 17th of this year. Enacted in 2010 to offset unemployment, the HIRE (Hiring Incentive to Restore Employment) Act provided employers with a dual-pronged incentive to hire and retain unemployed workers. While many businesses have already taken advantage of the HIRE Act by claiming the payroll tax exemption as far back as mid-2010, until now, most have not been able to claim the business tax credit portion of the HIRE Act, known as the “retention credit.”
Upcoming Opportunity to Claim the Business Tax Credit Portion of the HIRE Act
The HIRE Act consists of a payroll tax exemption AND a business tax credit. The business tax credit is a retention credit for qualified workers who were hired after February 3, 2010 and who were retained for 52 consecutive weeks. The 2011 tax filing deadline for most calendar year business tax return filers represents the first opportunity many employers have had to claim this retention credit. Fiscal year business tax return filers are also eligible to claim the credit at their required filing date. The tax credit amounts to either 6.2% of the federal taxable wages paid to qualified employees over the 52-week period, OR $1,000, whichever is lesser.
Employers Can Still Claim the Payroll Tax Exemption by Filing a Form 941-X to Amend Earlier Filings
Many businesses which intended to pursue the HIRE Act have already claimed the payroll tax exemption (6.2% of the social security wages of qualified employees between March 19 and December 31, 2010) by filing Forms 941 in Q2, Q3, and Q4 of 2010. For employers who have not yet claimed the credit, these employers also have the option to claim the payroll tax exemption retroactively by filing a Form 941-X to amend their previously filed forms for those four quarters.
Both the Payroll Tax Exemption AND the Retention Credit May be Claimed Retroactively by Amendment
ETS tax experts have confirmed with the Tax Law Department at the IRS that it will be possible to make amendments on 2011 annual tax returns in order to file for the HIRE Retention Credit retroactively, if necessary. The time frame for filing an amended return for the Retention Credit is 3 years from the date of filing, or 2 years from the date the tax is paid.
Don’t Miss Out on this Important Opportunity to Offset Dramatically Rising Employment Costs
In this climate of high unemployment and rising taxes for employers, it’s important to offset rising employment costs by taking advantage of every opportunity to extract savings from your employment taxes. The HIRE Act is a “no-brainer,” with potential savings to employers estimated at over $10 billion by the U.S. Treasury. Still, many employers have yet to claim this credit.
Eligible employers include both taxable businesses and tax-exempt organizations .
Want to find out what kind of savings the HIRE Act credits may have in store for you?
