Employers hiring veterans by the end of the year could get an expanded tax credit and should file claims for the credit soon, the Internal Revenue Service said in the Nov. 9 edition of its Tax Tips publication.
IRS explained that the tax benefit was increased by the VOW to Hire Heroes Act of 2011, which expanded the Work Opportunity Tax Credit (29 HRR 1244, 11/21/11).
Many businesses may qualify to receive thousands of dollars through the credit, but only if veterans begin work before the new year, IRS said in Tax Tip 2012-14.
Employers may be able to claim the expanded WOTC for qualified veterans who begin work on or after Nov. 22, 2011, but before Jan. 1, 2013, the agency said. The maximum credit is $9,600 per worker for employers that operate for-profit businesses, or $6,240 per worker for tax-exempt organizations, according to the agency.
IRS said the amount of the credit will depend on factors such as the length of the veteran's unemployment before being hired, the number of hours the veteran works, and the amount of wages the veteran receives during the first year of employment.
According to the publication, employers hiring veterans with service-related disabilities may be eligible for the maximum tax credit.
The agency said employers must file Form 8850, Pre-Screening Notice and Certification Request for the Work Opportunity Credit, with their state workforce agency. For employers to get the credit, the form must be filed within 28 days after the qualified veteran starts work.
IRS noted that some states accept Form 8850 electronically.
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