I received a call yesterday from a very nice Human Resources Manager asking about the HIRE Act’s Payroll Tax Exemption’s “family member” restriction. Employers can not claim the payroll tax exemption for wages paid to members of the employer’s family. Sounds simple, but exactly whose family members are restricted? Let’s explore this issue a little.
On the IRS website, in response to the question “Who are eligible employees?” the IRS responds:
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.