IRS Form W-11 FAQ
Who are qualified employees?
Qualified employees are individuals who begin employment with a qualified employer after February 3, 2010, and before January 1, 2011, who have been unemployed or employed for less than 40 hours during the 60-day period ending on the date such employment begins, and who are not family members of or related in certain other ways to the employer.
Do the qualified employees need to do anything to make it possible for their employer to claim the payroll tax exemption?
Yes, qualified employees must certify by a signed affidavit, under penalties of perjury, that they have not been employed for more than 40 hours during the 60-day period ending on the date they started employment.
Is the 60-day period continuous?
The 60-day period must be continuous.
Does the payroll tax exemption apply to wages paid to a qualified employee hired to replace an existing worker whose employment terminated?
The payroll tax exemption does not apply to wages paid to an employee who is hired to replace an existing worker, unless the existing worker terminated employment voluntarily or was terminated for cause.
Does the payroll tax exemption apply to wages paid to an employee who was previously laid off and then rehired by the same or a related employer after a 60-day period?
Yes, an employer may apply the payroll tax exemption to wages paid to a rehired employee who is otherwise a qualified employee.
If an employer lays an employee off because of lack of work and later, when work picks up, hires a new employee, can the payroll tax exemption apply to wages paid to the new employee?
Yes, if the new employee is a qualified employee (i.e., was employed for less than 40 hours during the prior 60 days).
Does the payroll tax exemption apply only if the employer previously laid employees off?
No, the payroll tax exemption can apply to wages paid to any qualified employee.
If an employer hires a recent graduate who has been in school for some or all of the 60 days preceding the start of his/her employment, does the payroll tax exemption apply to wages paid to the employee?
Yes, if the employee is a qualified employee. It is not necessary that the individual was previously employed and has lost his or her job to be a qualified employee.
Are employees required to complete the Form W-11?
No, however, the university cannot take advantage of the tax credit when employees who qualify do not complete the form. This tax credit represents immediate savings to the university and newly hired or rehired employees should be encouraged to complete it if applicable.
How do we handle new employees who were paid before the W-11 was available?
HR and Payroll will be contacting new hires directly and asking them to review the W-11 and complete it if applicable. We will be able to adjust the employer taxes retroactively.
What happens in December?
Unless the act is extended, the university will begin paying the employer portion of FICA on any wages paid after December 31, 2010.