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.
Wisconsin Governor Scott Walker signed three bills yesterday, designed to help military veterans in that state to find jobs. Each of the bills had been authored by Wisconsin State Representative Evan Wynn. (more…)
The House – Senate Conference has come to an agreement on what is now dubbed The Middle Class Tax Relief and Job Creation Act of 2012. Expectations are high that both the House and Senate will quickly pass the bill. President Obama has already indicated he will sign the bill.
Unfortunately, the tax extenders, including the general WOTC extension, were completely excluded from this legislation. All WOTC categories except for those favoring military veterans must now wait to be extended by another yet future tax bill.
As I’ve summarized before, this situation is not unusual for the Work Opportunity Tax Credit (WOTC) program. Of the eight times Congress has acted to renew or extend the WOTC program, three were passed retroactively months after the program’s legislative authority had expired.
- The first was in March 2002 after WOTC expired on December 31, 2001.
- The second was in October 2004, about ten months after WOTC expired on December 31, 2003.
- The worst example to date was in December 2006, when the program was reauthorized almost 12 months after its expiration.
In each of these events, the renewal was made effective retroactively back to the date of expiration. In other words, employers were eligible to claim tax credits generated by properly certified employees hired between the expiration date and the date the WOTC program was renewed.
We continue to anticipate a similar re-authorization in 2012. For this reason, my firm will continue to process and submit WOTC applications under all employee-eligibility categories — not just for veterans.
As employers consider their strategy for 2012, they should remember that even though a general extension has not yet been passed, eligibility-categories for hiring military veterans are already authorized through 2012 by the VOW to Hire Heroes Act of 2011. The amount of tax credit currently offered for hiring unemployed veterans goes as high as $9,600 per qualifying hire.
This is an excellent opportunity to more affirmatively recruit veterans for your workforce.
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…)
The VOW to Hire Heroes Act was signed today by President Obama. (see Business Week article from today.) As previously mentioned, this bill expands the eligible-veterans categories under the Work Opportunity Tax Credit (WOTC) program and extends the new categories through December 31, 2012. Unless the legislative language was modified prior to final passage, my understanding is that the new WOTC categories will become effective immediately. (more…)
Legislative language for the VOW to Hire Heroes Act of 2011 is now available. The bill will extend WOTC categories for eligible veterans through December 31, 2012 but retains the current expiration date for all other categories. In other words, if a general extension of WOTC is not eventually included in a tax extender bill (or in some other legislation) the WOTC program will look very different in 2012. (more…)
Michigan State Representative Charles Smiley (Dem) is the leading sponsor for new state legislation that would offer a significant tax break to employers who hire an unemployed veteran. (more…)
Republican Senate Minority Leader Mitch McConnell told the Senate this morning that he would be voting FOR the VOW to Hire Heroes Act of 2011, giving the nod for other Senate Republicans to support the measure. The act should now pass quickly through the Senate and the House. (more…)
Important information today from Paul Suplizio President of the WOTC Coalition. As I mentioned yesterday, Senate Democrats hope to pass the veterans- and WOTC- related provisions of President Obama’s jobs bill this week as an amendment to a bill recently passed by the House with significant bipartisan support.
Today, Senator Majority Leader Harry Reid announced he would support bringing the measure to the Senate floor for a vote. He hopes to win sufficient bipartisan support to pass it by Veterans Day (this Friday). (more…)
This morning during a speech at the Washington Navy Yard, President Obama took notice of high unemployment among US military veterans. Although he did not mention the Work Opportunity Tax Credit (or WOTC) by name, he described two new or expanded hiring tax credits obviously designed to fit into the WOTC rubric. (more…)