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.
Going to school full time with a family, however, might not be feasible without also finding work — ideally a part-time job or internship that could furthering your education while also providing income. I’ve watched my own nephew face this kind of challenge.
Last July we wrote about then Congresswoman Jacky Rosen (D-NV) and her efforts to expand the Work Opportunity Tax Credit (aka WOTC). More recently, and as a U.S. Senator, Rosen has introduced a companion bill in the Senate called the Hire Student Veterans Act (Senate Bill 537).
While we await this potential expansion of the WOTC Program, employers need to know that WOTC provides valuable tax credits right now. Most employers already hire eligible employees.
What would this bill do?
Like its forerunner in the House, this bill proposes to expand the WOTC Program’s target groups to include veteran students attending college on the GI Bill. This new WOTC qualification would offer employers a tax credit of $2,400—equal to 40% of the veteran’s first $6,000 in wages. This is a standard WOTC scenario.
However, because it targets students (who are often not able to work full time), the bill also proposes to lower the WOTC program’s usual 400-hours threshold. For other target groups, if a qualifying employee works less than 400 hours, the rate used to calculate the tax credit must be reduced from 40% to 25%. For these veteran students, however, the 40% calculation rate would kick in with just 120 hours worked.
Our hope is that this expanded WOTC tax credit would give more employers an incentive to create paid internships for veteran students. These are valuable work opportunities that could help veterans like my nephew stay in school while earning an income at a job that simultaneously enhances their educational experience.
Since its introduction near the end of February, Senate Bill 537 has gained an additional two cosponsors, bringing the current total to seven.
Current Senate Co-sponsors include:
- Jerry Moran (R-KS)
- Debbie Stabenow (D-MI)
- Cory Gardner (R-CO)
- Tammy Baldwin (D-WI)
- Kevin Cramer (R-ND)
- Steve Daines (R-MT)
- Catherine Cortez Masto (D-NV)
While we await this potential expansion of the WOTC Program, employers need to know that WOTC provides valuable tax credits now. Most employers already hire eligible employees.