New Tax Breaks for Hiring Unemployed Veterans
Under the Recovery Act, employers who hired certain unemployed veterans were eligible for a tax credit up to 40% of the first $6,000 (maximum credit of $2,400). This credit was to expire at the end of 2010.
Last week, the President signed into law two new tax credits for businesses dubbed the “Returning Heroes Tax Credit” and the “Wounded Warrior Tax Credit.” The credit amounts depend on the amount of time the veteran was unemployed. Here are the breakdowns:
The Returning Heroes Tax Credit
- 40% of the first $6,000 paid to a veteran that has been out of work for between 4 weeks and 6 months
- 40% of the first $14,000 paid to a veteran that has been jobless for 6 months or more
The maximum amounts for the credits range from $2,400 to $5,600 per newly hired unemployed veteran.
The Wounded Warrior Tax Credit
- 40% of the first $24,000 paid to disabled veterans that have been jobless for 6 months or more
The maximum amounts for the credit is $9,600 per newly hired unemployed disabled veteran. This is an expansion of the “Work Opportunity Tax Credit” for disabled veterans which used to be capped at the first $12,000 of wages. This law expands the maximum tax credit from $4,800 to $9,600.
As always, feel free to contact a professional at Wallace Neumann & Verville, LLP for guidance regarding the new business tax credits.