Some
states and the federal government have policies in place
that gives businesses tax credits for hiring Veterans who
are out of work. These tax credits can range from
$1,000 to $15,000 per individual. All small businesses should
take advantage of this opportunity to hire good people and
save money at the same time.
Federal Government Program
The program at the federal
government level offers for-profit businesses up to $9,600
per veteran hired and up to $6,240
to non-profit organizations.
The amount of the credit
depends on a number of factors, including the length of the
veteran’s unemployment before hire, hours a veteran works
and the amount of first-year wages paid. Employers who hire
veterans with service-related disabilities may be eligible
for the maximum credit.
An eligible employer must
file Form
8850 with
the state workforce agency within 28 days after the eligible
worker begins work.
You can learn more about
the program at the IRS website.
You can also get more
indepth information from this IRS Q&A webpage.
Under the Heroes For Hire Income Tax Credit section
of the Alabama Taxes and Tax Incentives law, for tax years
beginning January 1, 2012, employers meeting the
requirements for the Full Employment Act of 2011 are
eligible for an additional $1,000 nonrefundable income tax
or financial institution excise (state-portion) tax credit
for each job created if the employee is a recently deployed,
unemployed veteran. Additionally, any recently deployed,
unemployed veteran who holds at least 50% ownership interest
in a start-up business is eligible for up to a one-time
$2,000 nonrefundable tax credit for expenses related with
the start-up. However, the job must pay more than $10.00 per
hour and you can't start claiming the credit until the
employee has completed 12 months of consecutive employment.
In the State of Alaska businesses can earn $3,000 for hiring
a disabled veteran or $2,000 for a non disabled veteran if
they work for more than 1,560 hours in a 12 consecutive
month period. These individuals would have to be unemployed
for four weeks before being hired. A veteran who is disabled
could not have been unemployed for more than 10 years and a
veteran who is not disabled could not have been unemployed
for more than 2 years. If a business could claim the credit
if it hires a seasonal Veteran employee for more than 500
hours.
The Arizona Veteran tax credit starts on December 31, 2013
and ends on December 31, 2016. The Arizona tax credit is
only good for one year (or partial year) in which the
employee was hired. The tax credit amount can range from
$2,000-$4,000. It is determined based on 10% of the salary
earned and paid to the employee during the taxable year. You
must hire a Veteran who is collecting unemployment benefits
at the time he/she is hired.
Delaware businesses that hire Veterans who have served
overseas can receive a tax credit that is equal to 10% of
wages, up to a maximum of $1,500. The credit may be taken
each of the employee's first 3-years on the job.
Illinois employers can earn a State income tax credit of up
to $5,000 annually for hiring veterans of Operation Desert
Storm, Operation Enduring Freedom, or Operation Iraqi
Freedom. The credit is 10 percent of the total wages paid to
every qualified Veteran hired after January 1, 2010.
Veterans must work at least 185 days during the tax year for
the employer to qualify for the Veteran's Tax Credit.
Governor Susana Martinez recently signed tax reform
legislation that will help create jobs for military veterans
on May 16, 2012. The Veteran Employment Tax Credit will
provide up to $1,000 to businesses each time they hire a
veteran who has recently been discharged from the military.
The Hire-a-Vet Credit encourages the hire of qualified
Veterans. Businesses must employ a qualified Veteran for no
less than 35 hours per week for one full year. A qualified
Veteran is someone who served on active duty in the US Army,
Navy, Air Force, Marine Corps, Coast Guard, Reserves,
National Guard, New York Guard or New York Naval Militia,
and was released from active duty by general or honorable
discharge after September 11, 2001. Qualified Veterans must
attest that they were not employed for 35 or more hours in
the previous 180 days. Businesses may earn up to $5,000 for
hiring a qualified Veteran, and up to $15,000 for hiring one
who is disabled.
Businesses may hire Veterans who have been discharged
(honorable or general) from the military within the last two
years and receive a tax credit of up to $2,400 in the first
year and a credit of up to $4,800 in the second year. The
qualified veteran must work for at least 35 hours per week.
The State of Vermont now provides a tax credit of up to
$2,000 to employers who hire a veteran with recent military
service. The tax credit also extends to veterans with recent
service who start their own business.
Tax credits are based on a percentage of the first $5,000 in
wages paid to the individual after one continuous year of
employment. Employers may claim a 30 percent tax credit for
hiring economically disadvantaged Korean conflict and
Vietnam era veterans, 25 percent for unemployed members of
the Guard and Reserves, or may claim a credit ranging from
10 to 100 percent for disabled veterans.
