last update 5-1-2010

Worker Retention Credit

An employer can claim a credit equal to the lesser of $1,000 or 6.2% of a retained worker's wages for a 52 week consecutive period for each newly hired worker eligile for the payroll tax holiday that is retained for at least 52 consecutive weeks. COMMENT

This means that the credit for any worker paid more than $16,130 per year is $1,000.

Qualified Employees

For purposes of the payroll tax exemption (and retention credit), a qualified employee includes any individual who:

1. Begins employment with the qualified employer after March 18, 2010,

2. Continues in that employment for a period of at least 52 consecutive weeks; and

3. Has earned wages during the last 26 weeks of that period equal to at least 80% of the wages for the first 26 weeks of the period.


It appears that a period of employment that qualified for the payroll tax holiday also counts toward the 52-week period required for the retention credit.

The credit applies for the first tax year in which the retained worker satisfies the 52-week test. It cannot be carried back to any tax year beginning before March 18, 2010.

========================  WARNING  =======================
                      AND DISCLAIMER
This information is provided for the reader's benefit in
becoming familiar with the legal matters discussed.  Your
particular facts may be different from the points above.
You should not rely on the above data without consulting a 
attorney to discuss the specific facts of your case
and the law of your state.

If you live in Louisiana and want to talk about your situation, please call me at the number below. Fees will be charged after initial consultation.

    Marvin E. Owen
    3036 Brakley Drive
    Baton Rouge, La 70816
    ph 225-292-0099
    toll-free 1-888-292-0116

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