Tax Credits For Employers Hiring Veterans
Hiring Veterans is not only good for your business and bottom line, it’s the right thing to do. And now there is good news: the Work Opportunity Tax Credit (WOTC), a federal tax credit available to employers for hiring veterans, has been renewed through August 31, 2018! There is no limit on the number of individuals an employer can hire to qualify to claim the tax credit.
Veteran employees have expertise in occupational specialties across the board. Veterans bring a great deal to the workplace including discipline and a superior work ethic. Military Connection is a Top 100 Employment Web Site and can connect you with this excellent audience of candidates from the Veteran community.
The tax credit employers can claim depends upon the target group of the individual hired, the wages paid to that individual in the first year of employment, and the number of hours that individual worked. There is also a maximum tax credit that can be earned.
Employers generally can earn a tax credit equal to 25% or 40% of a new employee’s first-year wages, up to the maximum for the target group to which the employee belongs. Employers will earn 25% if the employee works at least 120 hours and 40% if the employee works at least 400 hours.
Here are important forms and deadlines:
- By the day the job offer is made, applicant must complete page 1 of IRS Form 8850
- After the individual is hired, employer must compete page 2 of the same form, IRS Form 8850
- Complete ETA Form 9061 or ETA Form 9062 if the employee has been conditionally certified as belonging to a WOTC target group by a state workforce agency, Vocational Rehabilitation agency, or another participating agency.
- Within 28 calendar days of the employee’s start date, employers must submit the completed and signed IRS and ETA forms to their state workforce agency. States may accept applications via mail, fax, or e-mail or may have an automated WOTC process that accepts electronic submissions. If you are not sure how your state accepts applications, contact your state WOTC coordinator, or view the chart on state submission methods.