Thursday, January 26, 2012

Enhanced Work Opportunity Tax Credit (WOTC) for Hiring Qualified Veterans

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
Please call us at (219) 769-3616 with your questions or e-mail them to:

Mark Your Calendar

31 – Employers must furnish W-2 statements to employees. 1099 information
statements must be provided to payees. (1099B and consolidated statements must be provided by February 15.)
31 – Employers must file 2011 federal unemployment tax returns and pay any tax due.

28 – Payers must file information returns (such as 1099s) with the IRS.*
29 – Employers must send W-2 copies to the Social Security Administration.*

1 – Farmers and fishermen who did not make 2011 estimated tax payments must file 2011 tax returns and pay taxes in full.
15 – Deadline for calendar-year corporations to elect S status for 2012.
15 – 2011 calendar-year corporation income tax returns are due.

*April 2 if filing electronically.

Contact us at (219) 769-3616 or e-mail your questions to