Tuesday, May 25, 2010
Changes in Payroll and Reporting for 2010
Who’s Your Amazing Payroll Guy!
There have been some sweeping changes made to payroll reporting as a result of the Hire Act of 2010. This legislation was created and passed to provide incentives to employers to add employees.
These incentives are significant.
In 2010, you will have a “holiday” from the employer portion of the social security tax (6.20%) for any qualified employee hired after 02-03-2010. A qualified employee is any employee who:
• begins employment with you after February 3, 2010, and before January 1, 2011;
• certifies by signed affidavit, or similar statement under penalties of perjury, that he or she has not been employed for more than 40 hours during the 60-day period ending on the date the employee begins employment with you;
• is not employed by you to replace another employee unless the other employee separated from employment voluntarily or for cause (including downsizing); and
• is not related to you. An employee is related to you if he or she is your child or a descendent of your child, your sibling or stepsibling, your parent or an ancestor of your parent, your stepparent, your niece or nephew, your aunt or uncle, or your in-law. An employee also is related to you if he or she is related to anyone who owns more than 50% of your outstanding stock or capital and profits interest or is your dependent or a dependent of anyone who owns more than 50% of your outstanding stock or capital and profits
In other words, if this employee is hired and works the remainder of the year, and has wages of $20000 for the remainder of the year, you will save: 1240.00 in employer taxes for that employee in 2010. The accounting for these savings is done on your form 941 return done each quarter.
Is your head spinning yet? We have your back!
Here at Go-payroll.com, we have modified the payroll to handle these changes in the law.
In 2011, those employees qualified under the Hire Act, who remain employed for 52 weeks, and whose wages meet certain criteria, will qualify you for a $1000 tax credit on your corporate income taxes. Your tax professional can assist you in determining the additional criteria that must be met.
Be not afraid! The Go-payroll.com payroll system will track these employees for you and provide reporting in 2011 as to who qualifies for the credit.
Another massive change for employers and other business people was buried in the Health Care reform legislation. Starting with tax year 2012, businesses will have to issue 1099MISC forms to ANYONE whom they pay more than $600 in a year, regardless of whether they are a corporation or not. The IRS is attempting to reduce the monumental amount of unreported income that happens when 1099s are not filed.
We’re already on the case. Our ability to process your 1099s for you has been available for years. So don’t worry, just let us handle it. We already process and print hundreds of 1099s each year for our customers.
As we are fond of saying around here, “see how it feels to have and AMAZING payroll guy!”