The IRS has a $9,600 credit available for employers who hire a veteran before December 31st. The Veterans Opportunity to Work (VOW ) to Hire Heroes Act of 2011 made changes to the Work Opportunity Tax Credit (WOTC).
The Act added two new categories to the existing qualified veteran targeted group and made the WOTC available to certain tax-exempt employers as a credit against the employer’s share of social security tax. The Act allows employers to claim the WOTC for veterans certified as qualified veterans and who begin work before Jan. 1, 2013.
The credit can be as high as $9,600 per qualified veteran for for-profit employers or up to $6,240 for qualified tax-exempt organizations, but the amount of the credit will also depend on a number of factors, including the length of the veteran’s unemployment before hire, the number of hours the veteran works and the veteran’s first-year wages. The amount of the credit for qualified tax-exempt organizations may not exceed the organization’s employer social security tax for the period for which the credit is claimed.
Pre-screening and Certification:
All employers must obtain certification that an individual is a member of the targeted group, before the employer may claim the credit. The process for certifying the veterans for this credit is the same for all employers.
Generally, an eligible employer must file Form 8850, Pre-Screening Notice and Certification Request for the Work Opportunity Credit, with their respective state workforce agency within 28 days after the eligible worker begins work. Notice 2012-13 (http://www.irs.gov/pub/irs-drop/n-12-13.pdf) provides additional guidance on submission of Form 8850, as well as the Form 8850, Pre-Screening Notice and Certification Request and the instructions (http://www.irs.gov/uac/Form-8850,-Pre-Screening-Notice-and-Certification-Request-for-the-Work-Opportunity-Credit