Sage MAS 90 and MAS 200 941 Update for HIRE Act

The Sage ERP MAS 90 and MAS 200 2010 Q2 Payroll Update is now available on Sage Online. This important update includes a new 941 form and provides the software changes necessary to capture and process the required employee information in order for you to comply with the new HIRE Act. The new 941 form is required for Q2 filings for all Payroll customers, even if the HIRE Act doesn’t apply to you.

Carefully follow the instructions included on the download to ensure the appropriate calculations.

The HIRE Act encourages companies to hire unemployed workers by exempting certain wages from the employer’s portion of Social Security taxes (payroll tax exemption), and by providing employers with a business tax credit if new hires are retained for at least 52 consecutive weeks. For an employer to receive these tax benefits, the unemployed worker must be a “qualified individual”. A qualified individual is anyone who:

1. Begins work for a qualified employer after Feb. 3, 2010 and before Jan. 1, 2011
2. Certifies by signed affidavit (under penalties of perjury) that he has not been employed for more than 40 hours during the 60-day period ending on the date the employment begins
3. Is not employed to replace another employee of the employer unless that former employee separated from employment voluntarily, or for cause
4. Is not related to the employer (under rules similar to those for related individuals in IRC §51(i) ) [ IRC §3111(d)(1) ].

The IRS has drafted Form W-11, Hiring Incentives to Restore Employment (HIRE) Act Employee Affidavit, to help employers meet the second requirement under “qualified individual”. The form instructions state that the employee must complete and sign the affidavit, or a similar statement, under penalties of perjury, for an employer to receive the tax benefits under the HIRE Act. The Form W-11 requires qualified individuals to provide their name, Social Security Number (SSN), first date of employment, and name of the employer.

Additional information can be found on the IRS website, here.