The Internal Revenue Service has provided new guidance and forms that employers can use to claim the newly-expanded tax credit for hiring veterans.
The VOW to Hire Heroes Act of 2011, as enacted on November 21, 2011, expands the Work Opportunity Tax Credit (“WOTC”) to businesses hiring eligible unemployed veterans. For the first time the bill also makes the credit available to qualified tax-exempt organizations.
The IRS confirmed that the WOTC can be as high as $9,600 per veteran for for-profit employers, and up to $6,240 for tax-exempt organizations.
The amount of the credit depends on several factors, such as length of the veteran’s unemployment, number of hours worked and amount of first-year wages paid. Employers hiring veterans with service-related disabilities may be eligible for the maximum credit.
Normally, an eligible employer must file the appropriate WOTC forms with the state workforce agency within 28 days after the eligible worker begins work. However, according to the guidance from the IRS, employers have until June 19, 2012, to complete and file the newly-revised forms for veterans hired on or after November 22, 2011, and before May 22, 2012. The 28-day rule will again apply to eligible veterans hired on or after May 22, 2012.
The new IRS guidance also allows for electronic submission of WOTC forms to the state workforce agencies within 28 days of the employee’s start date.
The US Department of Labor is expected to issue additional guidance to the state workforce agencies providing further clarification.
CMS helps companies of all sizes save money by taking advantage of the Work Opportunity Tax Credit. Call Brian Kelly at 1-800-517-9099 today to see if it makes sense for you.