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Date: December 30, 2010

Bulletin Number: SU-177

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Subject

Expiration of the HIRE Act.

Purpose

To inform agencies of the expiration of the HIRE Act employer tax credit and of the Office of the State Comptroller’s (OSC) approach to update affected employee records.

Affected Employees

Employees hired under the HIRE Act.

Effective Date(s)

Administration paychecks dated January 5, 2011
Institution paychecks dated January 13, 2011.

Background

The HIRE Act (Hiring Incentives to Restore Employment Act) exempts employers on the portion of employer paid Social Security taxes for qualified employees during employment between 3/19/10 and 12/31/10.  (Please refer to Payroll Bulletin Number SU-174 for additional information)   The HIRE Act expires on 12/31/10; therefore, the Social Security tax for employers resumes effective 1/1/2011 and employee records must be updated.

OSC Actions

OSC will automatically update the FICA status for employees hired under this Act.  A row will be inserted into the job record for Active, Paid Leave, or Leave employees who had a FICA status of “ER FICA Exmpt.”  The effective date of the change will be 12/9/2010.  The Action/Action Reason code used will be DTA/CFI.  The FICA status will be changed to “Subject.”  Any future dated job rows for these employees will also be updated.  The job record for employees who are Terminated, Retired or Deceased will not be updated.

Agency Actions

Agencies will no longer have the FICA status option of “ER FICA Exmpt” available in PayServ, as the code will be inactivated.

Questions

Questions regarding this bulletin may be emailed to the Tax & Compliance mailbox.