If you are thinking of hiring; now is the time.  There are two new tax benefits available to employers hiring workers who were previously unemployed or only working part time.  This is part of the new $17.6 billion Job Bill, or officially known as the Hiring Incentives to Restore Employment (HIRE) Act which was signed by the President in mid-March. 

What this means for you:

·         Tax Benefit 1:  For every “Qualified” employee (defined as Unemployed for the previous 60 days or worked less than 40 hours in the previous 60 days) Employers will not have to pay FICA tax on these employees from 2/3/10 – 12/31/10.   

·         Tax Benefit 2:  For each worker retained for at least a year, businesses may claim an additional general business tax credit, up to $1,000 per worker, when they file their 2011 income tax returns

In Dynamics GP Payroll, it will work similar to the following (details to be worked out):

1.    A “Qualified” employee is someone that has been unemployed for the previous 60 days or worked less than 40 hours per week in the previous 60 days.  These employees will be flagged in Employee Maintenance in a new field.

2.    A new 941 report will have at least 2 new fields:  1. Number of employees in the date range that are qualified, and FICA amount the employer can reduce.

3.    Before the Q2 941 report is run, the Dynamics GP code change will need to be made and the employees flagged.