The tax credit for businesses that hire unemployed veterans has been enhanced now that the president has signed into law H.R. 674, the “3% Withholding Repeal and Job Creation Act.” The Act extends the qualifying period for hiring veterans, broadens the categories of veterans qualifying for the work opportunity credit, “fast-tracks” the qualification process for qualified veterans, and provides tax-exempt employers with a credit against payroll taxes for hiring qualified veterans.
The credit amount varies with how long the veterans have been unemployed.
It’s 40% of the first $14,000 of pay for veterans ($24,000 if disabled)
who have been jobless for six months or more in the year before they
were hired, and 40% of the first $6,000 of wages for veterans who have
been out of work at least four weeks but less than six months. The credit
applies for eligible veterans starting work after November 21, 2011 and before January 1, 2013. Tax exempt groups can take the credit as an offset against social security payroll taxes.
To be a “qualified” veteran, certain information must be gathered by the employer on or before the day a job offer is made. Currently, the information must submitted to your state workforce agency on Form 8850 no later
than the 28th day after the applicant begins work for you to certify that
the individual is a member of a targeted group for purposes of the work opportunity credit. Please see the Department of Labor website for the
latest requirements at http://www.doleta.gov/business/incentives/opptax.
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