Unemployment stuck at 12.6% in California

Even though the state of California added 14,200 jobs in April, the unemployment rate didn’t budge much – It continues to be 12.6 percent. According to the U.S. Bureau of Labor Statistics, California’s rate is the third highest in the nation, right behind Michigan coming in at 14 percent and Nevada’s 13.7 percent. We’ve heard whispers of the economy improving, however, with unemployment numbers like these, as the saying goes, proof is in the pudding!

But, I am all about hope, and the good news is that California payrolls did grow by a total of 56,000 this year and hopefully the new HIRE ACT tax breaks will get employers more hiring again. I want to know what you think; do you believe California’s unemployment rate is going to fall by the end of summer? Tell me your thoughts on Facebook or on my Twitter at www.twitter.com/ronideutch.

Hire this Summer and Get a Tax Break

If you are an employer, you don’t want to overlook the HIRE Act tax benefits. If you are looking to hire some new employees, college students are a great idea for a summer position. This is exactly what Congress is trying to encourage people to do, hire an employee who hasn’t worked more than 40 hours in the last 60 days before getting hired, and you may qualify for a temporary tax break. Passed in March, the Hiring Incentives to Restore Employment (HIRE) Act would allow an employer with any qualified hire after February 3rd to skip paying the 6.2% Social Security taxes on the worker’s wages from March 19 through the rest of the year. This would save an employer nearly $2500 on $40,000 of pay.

A qualified hire would be someone who is unemployed this year (after February 3, 2010 and before Jan 1, 2011) and has not worked over 40 hours in the last 60 days.

The law is most useful to large corporations where they can use the HIRE provisions to save millions of dollars, but the law is also useful to small businesses. For example, these tax breaks work for businesses this summer who want to hire kids on summer break to help with paperwork or businesses that want to hire college students who haven’t worked elsewhere in the last 60 days and therefore, would be considered a “qualified employee.”

Form to Claim Payroll Tax Exemption for Hiring New Workers Now Available

Unemployment rates were 9.9 percent nationally last month according to the Bureau of Labor Statistics. In the fight against unemployment in our country, President Obama signed the payroll tax exemption and new hire retention credit created by the Hiring Incentives to Restore Employment (HIRE) Act on March 18. The Act states that employers who hire unemployed workers this year (After February 3, 2010 and before Jan 1, 2011) may qualify for a 6.2 percent payroll tax incentive which will exempt them from the employer’s share of Social Security tax on wages.

The Internal Revenue Service announced today that they have issued the newly revised payroll tax form that most employers can use to claim the exemption of newly hired workers during 2010.

Additionally, for each qualified employee retained for at least a year whose wages did not significantly decrease in the second half of the year, employers may claim a “new hire credit” of up to $1,000 per worker.

To claim the Payroll Tax Exemption, employers would need to file IRS Form 941, Employers Quarterly Federal Tax Return. This means the HIRE act is not allowing employers to claim the payroll tax exemption for wages paid in the first quarter, only for wages paid in the second quarter. You can find the full instructions for claiming the exemption as well as claiming wages paid from March 19 - March 31 of this year on the IRS website.