Employers planning to claim an expanded tax credit for hiring certain veterans should act soon, according to the IRS. Many businesses may qualify to receive thousands of dollars through the Work Opportunity Tax Credit, but only if the veteran begins work before the new year!
Here are six key facts about the WOTC (as expanded by VOW to Hire Heroes Act of 2011):
1. Hiring Deadline: Employers may be able to claim the expanded WOTC for qualified veterans who begin work on or after November 22, 2011, but before January 1, 2013.
2. Maximum Credit: The maximum tax credit is $9,600 per worker for employers that operate for-profit businesses, or $6,240 per worker for tax-exempt organizations.
3. Credit Factors: The amount of credit will depend on a number of factors. Such factors include the length of the veteran's unemployment before being hired, the number of hours the veteran works and the amount of the wages the veteran receives during the first-year of employment.
4. Disabled Veterans: Employers hiring veterans with service-related disabilities may be eligible for the maximum tax credit.
5. State Certification: Employers must file Form 8850, Pre-Screening Notice and Certification Request for the Work Opportunity Credit, with their state workforce agency. The form must be filed within 28 days after the qualified veteran starts work. For additional information about your SWA, visit the U.S. Department of Labor's WOTC website.
6. E-file: Some states accept Form 8850 electronically.
Visit the IRS.gov website and enter 'WOTC' in the search field for forms and more details about the expanded tax credit for hiring veterans. Links:
These free resources should not be taken as tax or legal advice. Content provided is intended as general information. Tax regulations and laws change and the impact of laws can vary. Consult a tax advisor, CPA or lawyer for guidance on your specific situation.