Veteran Tax Credits Extended and Increased In Scope - Law Encourages Businesses to Hire Vets
NASHVILLE – The Vow to Hire Heroes Act of 2011 amends and expands definitions of the veteran target groups for employers hiring veterans through the Work Opportunity Tax Credit program.
“The Vow to Hire Heroes Act provides tax incentives for employers to hire both short-term and long-term unemployed veterans and affords larger tax credits for hiring certain categories of veterans,” said Labor & Workforce Development Commissioner Karla Davis. “The extension of the veterans’ category of the Work Opportunity Tax Credit is a needed strategy to increase employment opportunities for veterans and to reduce the unsatisfactorily high unemployment rate of veterans.”
“It is heartbreaking to know that we have Veterans and Reserve Component members who dedicate their lives for our country by serving in the military, and have now found themselves without a job,” said Veterans Affairs Commissioner Many-Bears Grinder. “The new tax credit program will help reduce the number of unemployed Veterans in the State of Tennessee by putting better incentives in place for employers to hire retired members of the military. This legislation will help secure employment and provide a brighter future for the men and women who served our country.”
The legislation, signed into law by President Obama in November 2011, establishes tax credits for employers for hiring from five veteran target groups, as follows:
Qualified Short-Term Unemployment Insurance (UI) Recipient Veteran A credit of 40 percent of the first-year wages up to $6,000 (maximum credit of $2,400) for hiring a veteran who has been receiving UI for at least four weeks and less than six months within the one-year period ending on the hire date.
Qualified Long-Term UI Recipient Veteran
A credit of 40 percent of the first-year wages up to $14,000 (maximum credit of $5,600) for hiring a veteran who has been receiving UI for at least six months within the one-year period ending on the hire date.
Qualified Recently Separated Disabled Veteran
A credit of 40 percent of the first-year wages up to $12,000 wages (maximum credit of $4,800) for hiring a veteran with a service-connected disability who was discharged within the past 12 months
Qualified Long-Term U.I. Recipient Disabled Veteran
A credit of 40 percent of the first-year wages up to $24,000 (maximum credit of $9,600) for hiring a veteran with a service-connected disability who has been receiving UI for at least six months within the one-year period ending on the hire date
Qualified Food Stamp Veteran
A credit of 40 percent of the first-year wages up to $6,000 (maximum credit of $2,400) for hiring a veteran who is a member of a family who has been receiving food stamps for at least a three-month period during the previous 14-month period ending on the hire date
To take advantage of any of the veteran tax credits, the employer and employee must complete two forms – the IRS form 8850 (http://www.tn.gov/labor-wfd/forms/IRS_Form_8850.pdf) and the US Department of Labor form ETA9061 (http://www.tn.gov/labor-wfd/forms/ETA_9061.pdf). These forms must be postmarked and sent to the Tennessee Department of Labor & Workforce Development no later than 28 calendar days following the employee’s starting date of employment.
In an effort to streamline the WOTC application requirements, recent IRS guidance (Notice 2012-13) allows employers to submit a completed and signed Form 8850 to TDOL&WD via a fax transmission. All faxed WOTC applications should be sent to 615-532-1612.
For more information about tax credits for hiring veterans, contact Roger Littlejohn, state Work Opportunity Tax Credit coordinator, at Roger.Littlejohn@tn.gov.