Tax credits for hiring veterans
Many business owners are looking at their budgets this year with pinpoint precision, trying to find ways to cut costs and maximize profits. However, this year, businesses can add to their bottom line by doing something that normally costs money – hiring. In the recent fiscal cliff package that Congress negotiated, the work opportunity tax credits for veterans were extended through 2013. The tax credits reward businesses for providing employment to those who have served our country.
The Returning Heroes and Wounded Warriors opportunity credits provide tax breaks ranging from $2,400-$9,600:
- Under the Returning Heroes tax credit, businesses can receive up to $2,400 for hiring veterans who have been unemployed for at least four weeks, and can receive up to $5,600 if the veteran has been unemployed longer than six months.
- The Wounded Warrior Tax credit reimburses businesses at a maximum of $4,800 for hiring veterans with injuries incurred from service, and up to $9,600 for hiring veterans with service-related disabilities who have been unemployed for longer than six months.
How businesses apply for the tax credits
Those interested in the credit must fill out an 8850 IRS form and submit it within 28 days of hiring a veteran. In addition to this, businesses must also submit an Employment and Training Administration form to a Work Tax Opportunity coordinator in their area.
It’s certain that people everywhere are taking a hard look at their numbers this year, and readjusting budgets after the non-renewal of payroll tax deductions and increases in taxes for individuals making higher incomes. However, there is a silver lining in that there were provisions pushed forward this year that will provide some sense of relief to businesses hiring veterans who have served our country, and have been in extended periods of unemployment or face employment difficulties due to a service injury.
The increases in other areas aren’t ideal, but these tax credits do help lessen the sting for owners who are able to leverage the economic benefit of these credits, and benefit from the added professional value an Armed Forces veteran can bring.