Featured artwork by Courtney Chauvin.
Three weeks ago, we informed you about a coordinated passionate effort by the National Military Spouse Network to “Storm the Hilll” (as in Capitol Hill). Military spouses everywhere called upon Congress to reduce employment barriers faced by the husbands and wives of America’s soldiers. (See WOTC for Military Spouses – Encouragement for Unsung Heroes).
One of the group’s goals is to expand the Work Opportunity Tax Credit (WOTC) program to include military spouses as a target group. Their efforts are being rewarded.
Imagine you’re almost 30, out of the military for a few years and are raising your first child. You’ve bounced around between a variety of jobs and have now decided it’s time for college. You need that formal education to fill in the gaps from your military training and to set a course for your civilian career.
This is a follow-up to my recent post about tax benefits employers earn by hiring military veterans. In addition to strong skill sets and personal characteristics, many veterans can bring an added financial benefit to their employer through the Work Opportunity Tax Credit (or WOTC).
Employers naturally have questions about how veterans qualify. How long must a veteran have served? What if they have a service-connected disability? What are the specific tax credit amounts? Today, I’ll go into these details.
If you’re a business owner, CPA or hiring executive, this is for you. Everyone knows that hiring veterans is both the right thing and the smart thing to do for many reasons.
Military veterans bring a unique set of skills to the civilian labor market. Few organizations like the military can teach, enforce and reward the characteristics of teamwork, initiative, leadership, organization and mission.
The military is also a highly diverse and talented group of people. As a result, veterans have deep experience working well with others. That experience instills respect and the ability to adapt and excel in a wide variety of circumstances. (more…)
House Resolution 5845 was introduced by Congressman Ted Poe of Texas and referred to the House Ways and Means Committee last Friday (on May 18th). As of this afternoon, the actual text of the bill is not yet available. The title, however, is listed as
H.R.5845 – To amend the Internal Revenue Code of 1986 to extend the work opportunity tax credit for veterans and to allow an exemption from an employer’s employment taxes in an amount equivalent to the value of such credit.
Catching up with the VOW to Hire Heroes Act, which was signed by President Obama in November of last year, the Internal Revenue Service has issued an updated Form 8850 and some very important guidance.
Disconnected Youth: Although not unexpected, I should note that in preparing the updated IRS 8850 Pre-screening Notice, the IRS has removed the questions related to qualifying Disconnected Youth. This category expired on December 31, 2010.
We’ve been clinging to the hope that it would be added-back with the extension of WOTC. I personally have not given up on that hope. Also, if I am not mistaken, the Department of Labor’s current instructions to State Workforce Agencies still requires them to reserve disconnected youth applications on file pending future instructions.
Notice 2012-13: Notice 2012-13 provides guidance on a number of important issues and should not be overlooked. I suggest a thorough reading. Major topics covered include:
- Background of the new veterans categories
- Transition relief (a grace period extending the 28-day submission deadline for IRS 8850 for qualified veterans hired between November 22, 2011 and May 22, 2012)
- The use of electronic signatures for IRS 8850
- Signing or filing IRS 8850 by FAX transmission
- Guidance for tax-exempt organizations claiming WOTC
Request for Comments: In addition to the guidance provided by the IRS on these topics, the IRS is also requesting comments about (1) alternative methods for certification of qualified veterans and (2)alternative methods of filing Form 8850.
In summary, with this notice the IRS has given us a lot to think about and a lot of work to do.
The following instructions are copied directly from the document recently published by the US Department of Labor.
Vow to Hire Heroes Act – Work Opportunity Tax Credit Provisions: Interim Instructions for State Workforce Agencies and Employers
On November 21, 2011, the President signed into law the “Vow to Hire Heroes Act”, which amends and expands the definition of Veteran target groups for the Work Opportunity Tax Credit (WOTC). These provisions became effective the day after the President signed the Act into law (November 22, 2011). (more…)