The “HIRE Act,” passed in March, provides tax incentives for churches and nonprofit organizations to hire unemployed workers. One of these incentives is an exemption from Social Security payroll taxes for every qualified worker hired after February 3, 2010, and before January 1, 2011. This new incentive only applies to “lay” employees and does not apply to “minister status” employees.
A new IRS form is available for employers to document this payroll tax exemption for hiring unemployed workers. Form W-11 (Hiring Incentives to Restore Employment Act Employee Affidavit) is to be filled out by the new hire, certifying under penalty of perjury that he or she was either unemployed or worked fewer than a total of 40 hours during the 60 days prior to taking the current job. The W-11 forms are not filed with the IRS. The employer must keep them along with other payroll records.
Health Care Tax Credits were included in the recent health care reform legislation for certain small businesses that provide health insurance to their employees. The IRS is in the process of mailing postcards to more than four million small businesses and tax-exempt organizations to make them aware of this new credit for 2010.
The credit is generally available to small companies and tax-exempt organizations that pay at least 50% of the cost of single coverage for their employees. For tax years 2010 to 2013, the maximum credit is 35% of premiums paid by eligible employers (25% for tax-exempts).
Under the right circumstances, these tax incentives can save churches and nonprofits thousands of dollars. Call us to schedule a consultation to discuss how these tax incentives may benefit your organization.
