Tax Credits For Employers Hiring Veterans
GOOD NEWS - In January during the Fiscal Cliff compromise, Congress extended the Tax Credits in the VOW To Hire Heroes Act through the end of 2013. Hiring Veterans is not only good for your business and bottom line but the right thing to do. Employers receive significant tax credits in addition to gaining viable employees. Veteran employees have expertise in occupational specialties across the board. Veterans bring a great deal to the workplace including discipline and a superior work ethic. Military Connection is a Top 100 Employment Web Site and can connect you with this excellent audience of candidates from the Veteran community. Employers including for profit and non-profits must apply within 28 days of hiring a Veteran!
For forms, instructions and contacts in each state, please email email@example.com
Fact Sheet on the Returning Heroes and Wounded Warrior Tax Credits
On November 21st of 2011 culminating the effort President Obama began on August 5th at Navy Yard and advanced through the American Jobs Act, the President signed The Vow to Hire Heroes Act of 2011. This law combined provisions of the veteransí tax credits from the Presidentís American Jobs Act, Chairman Murrayís Hiring Heroes Act, and Chairman Millerís Veterans Opportunity to Work Act into a comprehensive package that will aggressively attack the unacceptably high rate of veteranís unemployment.
- The Returning Heroes Tax Credit is a new hiring tax credit that incentives firms to hire unemployed veterans.
- Short-term unemployed: A new credit of 40 percent of the first $6,000 of wages (up to $2,400) for employers who hire veterans who have been unemployed at least 4 weeks.
- Long-term unemployed: A new credit of 40 percent of the first $14,000 of wages (up to $5,600) for employers who hire veterans who have been unemployed longer than 6 months.
- The Wounded Warrior Tax Credit doubles the existing tax credit for long-term unemployed veterans with service- connected disabilities.
- Maintain the existing Work Opportunity Tax Credit for veterans with service-connected disabilities (currently the maximum is $4,800).
- A new credit of 40 percent of the first $24,000 of wages (up to $9,600) for firms that hire veterans with service- connected disabilities who have been unemployed longer than 6 months.
How Businesses Can Apply for These Credits
- Within 28 days of hiring a veteran, businesses (including both for-profit and non-profit organizations) must submit IRS form 8850 and either the Department of Laborís Employment and Training Administration (ETA) form 9061 or 9062 to their local state Work Opportunity Tax Credit coordinator for certification.
- ETA is working to revise and issue ETA Form 9061, and update all other program-related materials, to reflect these new tax credits. During this transition period until revised forms are issued, employers are instructed to continue to use the current ETA Form 9061. When requesting certification for the veteran target groups using ETA Form 9061, employers and consultants should do the following:
- When using the hard copies of Form 9061, indicate in red at the top margin of the form the veteran target group for which they are requesting certification.
- When using an electronic form for the 9061 with those states that are fully automated, indicate in black at the top margin of the form the veteran target group for which they are requesting certification.
- Companies may need the following documents from veteran hires to complete these forms for certification: DD-214 or discharge papers; reserve unit contacts; FL 21-802; unemployment insurance claim records; and birth certificate.
- Once businesses receive certification letters from their state workforce agency, they can then claim the tax credit for certified workers on their annual income tax returns (e.g., IRS form 1120 for corporations, 1065 for partnerships, and 1040 for self-employed).
- For tax purposes, this tax credit is considered a general business credit. To the extent that general business credits claimed exceed taxable liability for a given year, the excess general business credits can be carried back to prior years or carried forward to future years.
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