Message to our Clients: HIRE Act Affidavit Now Available

True to their word, the IRS has finalized the affidavit form that newly hired employees must provide
in order for their employer to qualify for relief from FICA tax.

Under provisions of the HIRE Act, employers who hire a new employee between February 3, 2010
and Jan 1, 2011 are exempt from paying their share of the payroll tax (the 6.2% FICA/Social Security
withholding) effective with the employee’s first paycheck after March 18, 2010. The exemption is for
wages paid through December 31, 2010.

Further, the Act contains up to a $1000 tax credit for employers that retain those newly hired
employees for over a year, provided their second 6 month period wages are at least 80% of the first 6
months.

The affidavit has been posted on Alcott’s website where you can download it or you can download
the form from the IRS website (http://www.irs.gov/pub/irs-pdf/fw11.pdf)

Be certain to have only newly hired employees that meet the following criteria for the FICA
exemption complete the affidavit:

· Employee’s date of hire is after February 3, 2010 and before January 1, 2011
· Employee has not been employed for more than 40 hrs within 60 days prior to being hired
· Employee does not replace other employees of the employer, unless the former employee  
  left voluntarily or for cause
· Employee is not related to employer (child, descendent of child, sibling, parent in addition to
  other relatives as defined by the IRS)

The completed Affidavit form for current employees that are qualified should be completed
immediately and a copy faxed to Alcott within the next two weeks. Be sure to retain a copy for your
records as it will most likely be required when you file for the additional tax credit.

For future new hires that meet all of the criteria, please include the completed affidavit with the new
hire paperwork when it is submitted to Alcott.

If you have questions concerning employee qualification or any other provision of the Hire Act,
call Alcott HR or Payroll representative for assistance

Sincerely,

Lou Basso    Barry Shorten