State benefits. Some of the most tangible benefits to hiring veteran workers are tax credits, offered by many states to encourage businesses to hire veterans. To find out if your state offers financial incentives for hiring veterans, speak with your tax advisor or contact your state’s department of revenue. State hiring incentives can save you thousands of dollars in taxes. Typical state tax credit programs will give you a credit equal to a certain percentage of your employee’s total wages paid, up to a maximum of $5,000 to $10,000.
There are companies that specialize in getting businesses tax credits for qualifying employees, including veterans and military families. These companies charge a fee, but if the process of applying for tax credits is daunting, hiring someone to do it for you may be an option. Consult your accountant or tax attorney about the financial incentives available for training and hiring veterans.
Federal benefits. As of Jan. 1, 2014, the tax credits previously available at the federal level to businesses (some of these credits stemmed from the VOW to Hire Heroes Act) were not renewed by Congress. The U.S. Department of Labor, however, is still encouraging businesses to track and report new veteran hires because Congress might reauthorize the credits.
Here are two credits that had been available:
Returning Heroes tax credit. This provided for-profit employers up to $2,400 for hiring veterans who had been unemployed for more than four weeks, or up to $5,600 for hiring veterans who had been out of work for more than six months. The maximum credit available to certain tax-exempt organizations was $1,560 for hiring a veteran who had been unemployed for four weeks, or $3,640 for hiring a veteran who had been out of work for more than six months.
Wounded Warrior tax credit. This continued the previous Work Opportunity Tax Credit (WOTC) but provided a new credit of as much as $9,600 to for-profit businesses and up to $6,240 to certain tax-exempt organizations that hired a veteran with a service-connected disability who had been out of work for more than six months. (Also, there was some overlap between Returning Heroes and Wounded Warrior, so the maximum credit was $9,600 per veteran.) For more information on the WOTC, click here.