Tuesday, September 17, 2013

Little-Used Tax Credit for Hiring Disabled Vets Can Be a Boon to Employers

There is a significant tax benefit for employers who hire a qualified veteran.  A tax return credit is available to those who hire vets before December 31, 2013.  The business can receive up to $9,600 in tax credit as part of the Work Opportunity Tax Credit (WOTC). The credit is part of other business-related tax credits on the Form 3800, General Business Credits.
Are many employers claiming the credit early next year? Right now, it is hard to say.  The numbers show that more vets are being hired: according to the Bureau of Labor Statistics, job numbers have been slowly and steadily increasing for the past several years. In fact, the employment rate for veterans is currently much higher than that of the national average compared to civilian employment.
The unemployment rate for vets is currently at 6.3 percent, down from 6.6 percent in May 2013. And that's a drop from June 2012, which had an unemployment rate for veterans of 7.2 percent – mostly affecting Gulf War Era veterans.  The latest drop in vet unemployment rates seems to have been caused at least in part by the Veterans Administration pushes for greater employment and visibility for vets, including Hiring Our Heroes and the Veteran Retraining and Assistance Program. Also, say veteran advocates, there seems to be a greater acceptance from civilian employers that hiring veterans means access to employees with extensive training, proven discipline and undeniable experience. A number of large corporations and nonprofit groups have launched programs and initiatives to hire more of the nation's veterans.
To get the credit, the employer must hire a qualified veteran. A qualified veteran is someone who has served on active duty (not including training) in the U.S. Armed Forces for more than 180 days, or who was discharged or released from active duty for a service-connected disability. Additionally, they  must be hired as an employee prior to December 31, 2013, and must be appropriately certified by the State Workforce Agency (SWA) as: a member of a family which receives food stamp assistance for three or more months during the previous 12 months prior to hiring; unemployed for four or more weeks, though less than six months, within the 12 months prior to the hiring;  gainfully entitled to their service compensation disability which was service-connected; hired not more than one year after their discharge or release from active duty. The vet must not be related to the employer, have worked for the employer previously, be a dependent of the employer or worked fewer than 120 hours during a one-year period.

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