The IRS recently issued additional information on the Veteran Tax Credit to encourage employers to hire veterans and heroes. Included in the Hire Heroes Act, 2011 that was officially announced on Veterans Day, the Returning Heroes and Wounded Warriors Work Opportunity Tax Credit grants any employer that hires a competent veteran some tax credits.
An eligible veteran is defined by the IRS as one with at least 4 weeks of accumulated unemployment, but not more than six months before being hired. Alternatively, those with combined period of six months before being hired are also considered as eligible for the tax credit.
The employers are allowed a tax credit for each veteran by law, with the employers who hire veterans with service-related disabilities qualifying for the maximum tax credits. The hours the veteran works, the amount of wages they are paid as well as duration of unemployment prior to being hired, are other factors that are looked into by the IRS when determining the value of the tax credit. The type of employer also helps a great deal in setting the value, is it a tax-exempt organization or a for-profit?
Also released by the IRS are the relevant forms; the Federal Form 8850, a downloadable Certification Request for the Work Opportunity Credit and Pre-Screening Notice. The schedule and timeline for filling the forms was also released to ensure that eligible employers don’t lose out on the credit. Those who hired after the deadline (May 22nd) are required to fill form 8850 within twenty eight days after successfully hiring a veteran who must have commenced work to claim the credit.
To make it easy for the employers to access all the relevant forms, the IRS electronically transmits or faxes the Form 8850 under the assumption that the workforce bureaus of the state accept submissions in the said formats.
Claiming of the credit is also easy as all an employer has to do is figure out the amount on the federal forms 5884-the PDF downloadable Work Opportunity Credit. The figure should be entered into the federal Form 3800-General Business Credit which can be downloaded in PDF format for filing alongside the income tax return of the employer.
More information about this worthy tax credit, please review Notice 2012-13 on the IRS website. You can also call the IRS officials to discuss how well you can take advantage of the tax credit by simply hiring veterans and heroes.