Monday, January 31st was your deadline to get your W-2’s out to all of your staff, so if you were like many it was a heart pumping scramble to the finish line to get that and your employment tax returns completed.
Since then discussing end of year activity with a few of my clients it seems that many were not aware (or only partially aware) that that federal government handed out thousands to business owners in 2010, and it is very likely in your cleaning business that you may have qualified. Don’t worry, all is not lost if you have not snapped up your cash yet, you still have time to made some amendments, but you better be fast.
The money that was available was through the HIRE Act which was part of the economic stimulus. How it worked was that employees hired between 2/3/10 and 12/31/10 who had a 60 day period of time during 2009 or 2010 prior to working for you where they worked less than 40 hours total then they may qualify to fill out a W-11 and you will receive 100% of the 6.2% that you paid for them in Social Security. There are some restrictions about them not being family members, etc. but in general many, many businesses in the cleaning industry should qualify, and make Social Security credits/refunds of thousands.
Had you been aware of these credits during the 2010 year you would have claimed the credit on your 941 or 944 federal employment tax returns. If you have a payroll company or accountant they may have told you if you qualified, but they may not have if they did not know you had qualifying employees. So, check you list of hires and see if you had anyone who potentially qualified, then look at your 2nd, 3rd, and 4th quarter 941 returns, (or annual 944 if the government has assigned that to you),and see if you claimed that. QuickBooks helped some business owner’s out by having it automatically calculate the credit for those that qualified, BUT only with its latest versions of the software, and only if you knew to set an employee up as qualifying.
As always check out the federal government requirements here http://www.irs.gov/businesses/small/article/0,,id=220749,00.html
Get your W-11 here http://www.irs.gov/pub/irs-pdf/fw11.pdf
And check with your financial advisor for your specific business advice.
Now for the sticky problem of what if you did not know that you qualified and did not claim your refund. (1) Get a 2010 W-11 filled out from those employees that qualified. (2) Check with your financial advisor about how to amend your 941 (or 944) using the 941X or 944X return to claim your refund. (3) The extra step is that those qualifying employees should have a place on their W-2’s to state the amount that you qualified for, so you need to amend the W-2’s for those that qualified, and the W-3.
Will the government be issuing the same credit for next year? NO. It may appear as so, because employees are not having to pay their 6.2% in social security this year and the deductions are automatically calculating for everyone in payroll services and software. However, that credit is for the EMPLOYEE’s portion…last year was for the EMPLOYER’s portion for those that qualified.
Never leave money on the table!