Yesterday, as a nation, we celebrated Veterans’ Day. Some communities held parades, courts and banks were closed. My kids didn’t have to go to school and many of my Facebook friends posted heartfelt thank you notes to the people in their lives that have served our country or generally to members of the Armed Forces for securing and protecting the freedoms we all hold dear. My dad is a veteran, as is my husband’s grandfather, and so are some members of my law firm and my friends. My husband and I discussed with our children many of the people we know who are veterans and the sacrifices they have made. Do you have family members or co-workers who are veterans? If you work with veterans, your company may qualify for a tax credit pursuant to the Veterans Opportunity to Work or VOW to Hire Heroes Act of 2011. But time is running out to take advantage of the credit.
Here’s how you qualify:
- Employers may claim the expanded Work Opportunity Tax Credit for qualified veterans who were hired between November 22, 2011 and January 1, 2013. This includes both for-profit and tax exempt non-profit employers.
To be considered a veteran for purposes of the tax credit, an individual must:
- Have served on active duty in the U.S. Armed Forces for more than 180 days or have been discharged or released from active duty for a service-connected disability; and
- Not have a period of active duty of more than 90 days that ended during the 60 day period ending on the hire date.
To be qualified for purposes of the credit, the veteran must be certified as:
- A member of a family receiving food stamps for at least a 3 month period during the 12 month period ending on the hire date;
- Unemployed for at least 4 weeks but less than 6 months in the 12 month period ending on the hire date;
- Unemployed for at least 6 months in the 12 month period ending on the hire date;
- Entitled to compensation for a service-connected disability and unemployed for at least 6 months in the 12 month period ending on the hire date; or,
- Entitled to compensation for a service-connected disability and unemployed for at least 6 months in the 12 month period ending on the hire date.
- Employers must file a Form 8850 with their state work force agency to claim the credit. For most employees, the Form 8850 must be filed within 28 days after the eligible worker begins work.
- The qualified veteran must work 120 hours for any credit to apply.
Here’s how the credit works:
- For-profit employers claim the tax credit as a general business credit against their income tax.
- Qualified tax-exempt organizations claim the credit against the employer social security tax.
- The maximum tax credit is $9600 per worker for employers that operate for-profit businesses, or $6240 for tax-exempt organizations.
- The amount of the credit will depend on a number of factors, including length of the veteran’s unemployment before hire, the number of hours the veteran works and the wages the veteran receives during the first year of employment.
- Employers hiring veterans with service-related disabilities may be eligible for the maximum tax credit.
(For more information, check out: http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Expanded-Work-Opportunity-Tax-Credit-Available-for-Hiring-Qualified-Veterans).
As we have all seen in the news, veteran unemployment is a big problem in our country. Many employers have reported to me that they prefer hiring veterans due to the skills, training and discipline instilled during their military service. Now hiring a veteran may not only be a good move for increasing the quality of your workforce, but for your tax bill as well. Bottom line, if you have recently hired veterans or if you are considering doing so in the near future, a visit to your accounting department is in order to make certain your company is getting all of the advantages from your hires. And next Veterans’ Day, you may have more heroes to point out to your children.