New tax credit for hiring vets

Hiring credits for vets

President Obama has signed into law increased tax credits for hiring certain veterans. The credits are part of the Work Opportunity Credit, which requires that employers certify through state jobs agencies that employees qualify for the credits.

The credit rules, effective for veterans hired as new employees:

– A maximum $4,800 credit (40% of the first $12,000 in qualifying wages) for veterans with a service-related disability hired within 12 months of discharge (no change from prior law).

– A maximum credit of $9,600 (40% of the first $24,000 in qualifying wages) for veterans with a service-related disability who have been unemployed for at least six months of the prior 12 months.

– A maximum credit of $5,600 (40% of the first $14,000 in qualifying wages) for non-disabled veterans who have been out of work for at least six months out of the prior 12 months.

– A maximum credit of $2,400 (40% of the first $6,000 in qualifying wages) for veterans who have been unemployed at least four weeks, but less than six months, in the past year.

Employers will have to either have the employee certified before hiring, or complete a “pre-screening notice (Form 8850) by the date of the employment offer and submit it to the state agency within 28 days after the employee’s start date.

As always, check with us, before finalizing your tax planning based on the above.