The Answer We Waited a Week For

Last Thursday I blogged about using the Employer Social Security Credit under the Hire Act. You can re-read the blog for the full scope of the discussion.  But one point that I made was that while researching questions on using the credit I wondered how the IRS would answer if the question of whether or not an employer can use the credit at the end of the quarter or do they have to do deposit by depost was put to them.

So as I said in the blog I e-mailed the IRS and asked the following question:

I have a webinar atendee who is using the Employer Social Security Tax Credit under the Hire Act for the first time in the second quarter.  The question is can an employer take the credit on the Form 941 only and forgo using the credit for each deposit made or must the credit be used as each tax deposit is made for the appropriate payrolls? 

I got the answer back on the following Tuesday so as promised here is the IRS's response to the question:

Since the credit allowed under the HIRE act reduces the total tax liability on the Form 941, the deposits may be reduced accordingly but it is not a requirements that those deposits be adjusted.  If the tax deposits are not reduced, the result will be an overpayment of the tax and a refund may be claimed when the Form 941 is filed.

Well I feel really great about this.  My answer to my seminar attendee was spot on! But it never hurts to confirm it with the IRS.

How are you using the credit?  Let us know