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Hiring Veterans...Pt1

February 3, 2018

 

 

Have you ever wondered what you can do for our veterans? More than the standard “Thank you for your service” statement, and actually do more? Guess what?!!! You can!

 

You can hire veterans transitioning from their military life & grow your business at the same time.  There are federal tax credits for hiring veterans, and here’s how you can get started.

 

For Part 1 we will be covering how to get all of your paperwork set up.

In Part 2 we will cover how to overcome the barriers of hiring veterans and getting them to work (check back soon!)

 

Federal Tax Credits for Hiring Veterans

Receive a Tax Credit of up to $9600 for Every Eligible Veteran Hired

HOW CAN YOUR ORGANIZATION CLAIM A TAX CREDIT FOR HIRING VETERANS?

On December 18, 2015, President Obama signed into law the Protecting Americans from Tax Hikes Act of 2015 (the PATH Act) that extends and modifies the Work Opportunity Tax Credit Program, WOTC), resulting in an extension of the Returning Heroes and Wounded Warrior Credits. Both of these credits expired on December 31, 2014, but were retroactively reinstated for 2015 and extended through the end of 2019. These credits, in addition to the Differential Wage Payment Credit, offer three ways your company can claim tax credits for employing qualifying veterans.

 

RETURNING HEROES TAX CREDIT

·        Short-term Unemployed: A credit of 40% of the first $6,000 of wages (up to $2,400) for employers who hire veterans who have been in receipt of unemployment insurance or compensation for at least 4 weeks or who have received assistance from a supplemental nutrition assistance program under the Food and Nutrition Act of 2008 for at least a three month period during the 15-month period ending on the hiring date

·        Long-term Unemployed: A credit of 40% of the first $14,000 of wages (up to $5,600) for employers who hire veterans who have been in receipt of unemployment insurance or compensation for longer than 6 months (whether or not consecutive) in the one-year period ending on the hiring date.

 

WOUNDED WARRIOR TAX CREDIT

·        Veterans with Services-Connected Disabilities: Veterans with service-connected disabilities hired within one year of being discharged from the military. The credit is 40% of the first $12,000 of wages (up to $4,800).

·        Long-Term Unemployed Veterans with Services-Connected Disabilities:A credit of 40% of the first $24,000 of wages (up to $9,600) for firms that hire veterans with service-connected disabilities who have been in receipt of unemployment insurance or compensation for longer than 6 months.

 

DIFFERENTIAL WAGE PAYMENT CREDIT

·        A credit of up to $4,000 for employers who pay Reserve and National Guard employees while they are away on active duty for more than 30 days and have been employed for more than 90 days. Formerly available only to small businesses in 2015, it is now permanently available to all employers.

 

HOW TO FILE FOR THESE CREDITS?

Below is a list of the forms needed to file for each of these credits:

Returning Heroes

·        IRS Form 8850

·        ETA 9061 or 9062

·        IRS Form 5884 (or 5884-C for tax-exempts)

Wounded Warrior

·        IRS Form 8850

·        ETA 9061 or 9062

·        IRS Form 5884 (or 5884-C for tax-exempts)

Differential Wage Payment

·        IRS Form 8932

 

To qualify for the WOTC incentive, the veterans eligibility must be verified. That means the prospective veteran employment candidate must have:

  • Served on active duty in the U.S. Armed Forces for more than 180 days, OR have been discharged or released from active duty for a service-connected disability;

  • AND; Not have a period of active duty of more than 90 days that ended during the 60-day period ending on the hiring date.

If your veteran candidate meets these eligibility requirements, then congratulations. Your organization is well on its way to hiring a highly skilled and valuable team member. And, the best part is that this tax credit has been renewed through August 31, 2018!

To collect on these credits, your company must do the following:

  • Complete IRS Form 8850 by the day the job offer is made.

  • Complete ETA Form 9061, or complete ETA Form 9062 if the employee has been conditionally certified as belonging to a WOTC target group by a State Workforce Agency, Vocational Rehabilitation agency, or another participating agency.

  • Submit the completed and signed IRS and ETA forms to your State Workforce Agency. Forms must be submitted within 28 calendar days of the employee's start date.

  • Wait for a final determination from your State Workforce Agency. The determination will indicate whether the employee is certified as meeting the eligibility for one of the WOTC target groups.

  • After the target group employee is certified by the State Workforce Agency, file for the tax credit with the Internal Revenue Service.

For additional information regarding veteran employment tax credits, visit: https://www.doleta.gov/business/incentives/opptax/

 

 

 

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