Wednesday, January 9, 2013

Veteran Tax Credits Extended



On January 1, 2013, Congress passed a bill that extended the Returning Heroes and Wounded Warrior Tax Credits through December 31, 2013. The Returning Heroes Tax Credit provides incentives of up to $5,600 for hiring unemployed veterans, and the Wounded Warriors Tax Credit doubles the existing Work Opportunity Tax Credit for long-term unemployed veterans with service-connected disabilities, to up to $9,600. 

The information below is good for military job seekers to know. Companies that actively hire veterans don't just do it for the tax credit, but it is always a plus in your column.  Many employers are hesitant to inquire about veteran, disability, and employment status, even though the Office of Federal Contracts Compliance Programs (OFCCP) has proposed that they do just this. So let potential employers know your status if you are eligible.

Who is an eligible veteran?

Returning Heroes Tax Credit
  • Short-term Unemployed: A new credit of 40% of the first $6,000 of wages (up to $2,400) for employers who hire veterans who have been in receipt of unemployment insurance or compensation for at least 4 weeks.
  • Long-term Unemployed: A new credit of 40% of the first $14,000 of wages (up to $5,600) for employers who hire veterans who have been in receipt of unemployment insurance or compensation for longer than 6 months.
Wounded Warrior Tax Credit
  • Veterans with Services-Connected Disabilities: Maintains the existing Work Opportunity Tax Credit for veterans with service-connected disabilities hired within one year of being discharged from the military. The credit is 40% of the first $12,000 of wages (up to $4,800).
  • Long-Term Unemployed Veterans with Services-Connected Disabilities: A new credit of 40% of the first $24,000 of wages (up to $9,600) for firms that hire veterans        with service-connected disabilities who have been in receipt of unemployment insurance or compensation for longer than 6 months.
Again, hiring a veteran is about a lot more than a tax credit. But like guest blogger Todd Hecht said in his post: "Hiring you is a business decision". So why not make your status known!

PLEASE NOTE: From the Battlefield to the Boardroom, its affiliates and its employees are not in the business of providing tax or legal advice to any taxpayer. This content is for general information purposes only, and is not intended or written to be used without the advice of the taxpayer’s independent tax advisor.

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