Employers may claim the credit for each retained worker. A retained worker is a qualified employee (see below) who remains an employee for at least 52 consecutive weeks, and whose wages (as defined for income tax withholding purposes) for the last 26 weeks equal at least 80% of the wages for the first 26 weeks. The amount of the credit is the lesser of $1,000 or 6.2% of wages (as defined for income tax withholding purposes) paid by the employer to the retained worker during the 52 consecutive week period.
A “qualified employee” is an employee who:
• Begins employment with you after February 3, 2010, and before January 1, 2011;
• Certifies by signed affidavit (Form W-11 or similar statement) under penalties of perjury, that he or she has not been employed for more than 40 hours during the 60-day period ending on the date the employee begins employment with you;
• Is not employed by you to replace another employee unless the other employee separated from employment
• Is not related to you. An employee is related to you if he or she is your child or a descendent of your child, your sibling or stepsibling, your parent or an ancestor of your parent, your stepparent, your niece or nephew, your aunt or uncle, or your in-law. An employee is also related to you if he or she is related to anyone who owns more than 50% of your outstanding stock or capital and profits interest or is your dependent or a dependent of anyone who owns more than 50% of your outstanding stock or capital and profits interest.
The credit may be claimed for a retained worker for the first taxable year ending after March 18, 2010 for which the retained worker satisfies the 52 consecutive week requirement. Calendar year taxpayers are first eligible to claim the credit on their 2011 tax returns due April 15, 2012. For fiscal year filers, the earliest date to file a return claiming the credit would be fiscal years ending after February 3, 2011.
Claim the credit using the below form: