ASK MICKEY, CPA
QUESTION: I’m a business owner and I want to hire a Veteran- are there any tax benefits?
ANSWER: Yes, Veterans can offer many skills, knowledge, and talents to a company. They can also help your business earn tax credits.
Businesses that hire eligible unemployed veterans can take advantage of a Work Opportunity Tax Credit (WOTC). (This credit is also available to certain tax-exempt organizations.) After recent changes, The Returning Heroes Tax Credit now provides incentives of up to $5,600 for hiring unemployed veterans, and the Wounded Warriors Tax Credit doubles the existing Work Opportunity Tax Credit for long-term unemployed veterans with service-connected disabilities, to up to $9,600.
Here’s the various veteran-related tax credits your company could qualify for: Unemployment Tax Credits:
- Qualified Long-term Unemployment
- Short-term Unemployment
- Long-term Unemployment: Wounded Warrior Tax Credits:
- Veterans with Services-Connected Disabilities:
Maintains the existing Work Opportunity Tax Credit for 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 new 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 compensation for longer than 6 months. The credit can be as high as $9,600 per veteran for for-profit employers or up to $6,240 for tax-exempt organizations.
Certain tax-exempt organizations can also take advantage of WOTC by hiring eligible veterans and receiving a credit against the employer’s share of Social Security taxes.
