1.  Begins employment with a qualified employer after February 3, 2010, and before January 1, 2011

 

2.  Certifies by signed affidavit, under penalties of perjury, that they have not been employed for more than 40 hours during the 60-day period ending on the date the individual begins employment with the qualified employer

 

3.  Isn't employed to replace another employee of the qualified employer unless that other employee separated from employment voluntarily or for cause

 

4.  Isn't related to the qualified employer in a way that would disqualify them for the WOTC credit. This includes the qualified employer's child, grandchild, sibling, parent, niece, nephew, uncle or aunt, or in-laws. For this purpose, a disqualified employee is one who has any of these relationships to anyone who owns more than 50% in value of a qualified employer.

 

Qualified Employer Defined

 

     A qualified employer is any employer other than a state or local government and includes agricultural employers, tax-exempt organizations and public colleges and universities. Household employers are not eligible.
  

CREDIT FOR RETAINED WORKERS

 
     For each worker retained for at least a year, a qualified employer may claim an additional general business credit, up to $1,000 per worker, when they file their 2011 income tax returns.
 
HOW THE PAYROLL TAX BENEFITS ARE CLAIMED
 
     Employers will claim the payroll tax benefit on their employment tax returns they file, usually quarterly. The benefits from any first quarter wages will be treated as a payment against the employer's OASDI tax for the second calendar quarter of 2010. The IRS is expected to issue guidance and revised forms detailing the procedures for claiming these benefits.
 
NOTE:  This has been a summary of the rules for these two new benefits for hiring unemployed workers. For further information on how these benefits apply to your business please contact us.