You may have heard about General Electric's plan to hire 5,000 veterans in the next five years. While the move may be motivated by moral responsibility, the company has a financial incentive, too. There are new tax credits for hiring veterans.
The VOW to Hire Heroes Act, signed into law in November, extended up to $9,600 in tax credits to employers who hire unemployed veterans. The rates are per-employee and apply to qualified veterans who begin work before January 1, 2013.
The law added two categories of veterans to the Work Opportunity Tax Credit. Under the changes, employers may be able to deduct up to the following amounts:
- $2,400 for a veteran that had been unemployed for more than 4 weeks;
- $5,600 for a veteran who had been out of work for more than 6 months; and
- $9,600 for a veteran who had been out of work for more than 6 months and has a service-related disability.
Whether or not a veteran qualifies depends on a variety of factors. This includes when they were last on active duty; whether they receive benefits under the Supplemental Nutrition Assistance Program; and how many hours they work. Employers must therefore obtain certification before claiming a tax credit for hiring a veteran.
Because the law is so new, the IRS is continually releasing updated instructions and guidance on the rules. If you think you have an employee who qualifies under the new regulations, talk to a tax attorney or your accountant about how you can get a tax credit for hiring a veteran.