The Form 941, Employer’s Quarterly Federal Tax Return, will be revised for the second quarter of 2010 due to recent legislation, including changes made by the “Hiring Incentives to Restore Employment Act”. The Act provides a Social Security tax exemption to certain employers, including tax-exempt organizations and public colleges and universities, who hire unemployed workers between March 19, 2010 and December 31, 2010. The legislation exempts qualified employers from paying the employer share of the Old Age, Survivors and Disability Insurance tax (OASDI or Social Security Tax) on wages paid to qualified individuals. The current OASDI rate is 6.2%.

A qualified individual:

• Begins work for a qualified employer after February 3, 2010 and before January 11, 2011;
• certifies by signed affidavit (under penalty of perjury) that he/she was employed for a total of 40 hours or less during the 60 day period ending on the date employment begins;
• is not employed to replace another employee of the employer unless that former employee separated from employment voluntarily or for cause; and
• is not related to the employer.

It is anticipated there will be another revision to the Form 941 for the third quarter of 2010. In addition, the IRS is anticipating changes to the Form W-2 as well as Forms 941-PR, 941-SS, CT-1, and the amended forms in the X series.

If you have any questions please contact Lewis, Hooper & Dick, LLC at (620) 275-9267.

To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. federal tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or tax related matter.

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