Key development: President Obama signs tax law that includes tax credits for businesses hiring short-term and long-term unemployed veterans.
Potential impact: Provides stronger incentive for businesses to hire veterans.
By Liz White
President Obama Nov. 21 signed legislation (H.R. 674) that includes a provision for tax credits for businesses hiring short-term and long-term unemployed veterans.
The veterans tax credit provisions, which Obama had proposed as part of his currently stymied jobs package (29 HRR 1214, 11/14/11), were enacted as part of a measure that includes a range of tax provisions, including the repeal of a 2005 law requiring governments to withhold 3 percent of payments over $10,000 to contractors.
Senate Democrats attached part of the president's jobs package to the tax legislation as a vehicle to pass tax credits for hiring veterans.
“Today the message is simple. For businesses out there, if you are hiring, hire a veteran,” Obama said. “It's the right thing to do for you, it's the right thing to do for them, and it's the right thing to do for our economy.”
The measure includes the Returning Heroes Tax Credit for new hiring of unemployed veterans. Businesses hiring veterans who have been unemployed for at least four weeks will be eligible for 40 percent of the first $6,000 of wages up to $2,400. Businesses hiring veterans who have been unemployed for longer than six months could get a credit for 40 percent of the first $14,000 of wages up to $5,600.
The law doubles the existing tax credit for hiring long-term unemployed veterans with service-related disabilities. It maintains the Work Opportunity Tax Credit for veterans with service-related disabilities with the maximum at $4,800.
The law also creates the Wounded Warrior Tax Credit that qualifies businesses hiring veterans who have service-related disabilities and have been unemployed for longer than six months for a credit of 40 percent of the first $24,000 in wages up to $9,600.
The amendment is paid for by extending existing mortgage fees on loans available to veterans.
The credits amendment also included a provision that allows the Department of Veterans Affairs to verify a veteran's self-reported income with the Internal Revenue Service and the Social Security Administration.
Text of H.R. 674 may be accessed at http://op.bna.com/dlrcases.nsf/r?Open=scrm-8nutcb.