In an ongoing attempt to stimulate the economy and create jobs, President Obama signed into law the Hiring Incentives to Restore Employment (HIRE) Act on March 18, 2010.
The Act establishes tax incentives for businesses to hire new workers. Employers who hire individuals (between the dates of February 3, 2010 and January 1, 2011), who have been out of work for more than 6 months, will be eligible for an exemption on their Social Security payroll tax for those employees.
Employers who have the newly-hired employees on their books from March 19, 2010 through December 31, 2010, will be able to reduce their Old Age, Survivors, and Disability Insurance (OASDI) portion of the Federal Insurance Contribution Act (FICA) taxes by 6.2 percent. The Act also provides an income tax credit of up to $1,000 for every new employee who is employed for 52 weeks.
To assist employers in claiming the new tax exemption, the Internal Revenue Service created form W-11, the Hiring Incentives to Restore Employment (HIRE) Act Employee Affidavit. This form will confirm that the eligibility of the newly hired employee and employers will not be able to claim the credit or tax exemption without attestation. Employers are responsible for keeping the form on-file.