Two New Tax Credits For Employers Who Hire Veterans
On November 21, 2011, President Obama signed into law two tax credits designed to bring unemployed veterans back to work. These new tax credits were part of the American Jobs Act propsed by the President in September.
The Returning Heroes Tax Credit offers a credit scaled to the length of time a veteran has been unemployed. A credit of up to $2,400 (40 percent of the first $6,000 in wages) is available when a newly-hired veteran had been unemployed at least four weeks. A credit of up to $5,600 (40 percent of the first $14,000 in wages) is available when a newly-hired veteran had been unemployed at least six months. This tax credit replaces the now-expired Recovery Act credit, which provided for up to $2,400 for employers hiring certain unemployed veterans.
The Wounded Warrior Tax Credit, meanwhile, provides a new credit of up to $9,600 (40 percent of the first $24,000 in wages) for employers who hire veterans with service-connected disabilities who had been unemployed longer than six months. This credit exists alongside the existing Work Opportunity Tax Credit, which provides up to $4,800 for all employers who hire veterans with service-connected disabilities. The Wounded Warrior credit essentially replaces the Work Opportunity credit for hires of long-term unemployed veterans.
These tax credits are part of a larger jobs initiative targeted at veterans. Among other executive actions, the Administration has created a job-match online resource, a Veterans Job Bank, and an assistance card for veterans seeking job counseling. Employers wishing to participate in the Job Bank may find further information here.
If you have questions about any of these initiatives, please do not hesitate to contact any member of our employment law group.
