New Law Gives Employers Tax Credits for Hiring Unemployed or Disabled Veterans

by Mike Mintz on December 19, 2011 · 1 comment

in martindale.com

At the end of last month, President Obama signed into effect a law, which provides new tax credits for businesses that hire unemployed or disabled veterans.  The law falls under Title II of the 3% Withholding Repeal and Job Creation Act and is entitled the Veterans Opportunity to Work to Hire Heroes Act of 2011 or the “VOW to Heroes Act.”  While the final text is not yet available online, the House bill, H.R. 67, can be found here.

The Act’s intention is to lower the high rate of unemployment among veterans by giving employers financial incentives, in the form of tax credits, to hire unemployed or disabled veterans.  The tax credits work as follows:

Short-term unemployed: Section 261(b) of the Act provides the employer with a tax credit of 40% of the first $6,000 of a veteran’s first-year wages (up to a $2,400 credit), if, during the one-year period before his hiring date, the veteran endured aggregate periods of unemployment of four or more weeks but less than six months.

Long-term unemployed: Sections 261(a) and 261(b) of the Act gives the employer a tax credit of 40% of the first $14,000 of wages (up to a $5,600 credit) paid to any veteran during his first day of employment, if during the one-year period before his hiring date, the veteran had aggregate periods of unemployment of six months or more.

Recent veterans with service-connected disabilities: Section 261(a) of the Act gives employers the already existing tax credit of 40% of the first $12,000 of first-year wages (up to a $4,800 credit) paid to any veteran who: (1) is entitled to service-related disability compensation and (2) has a hiring date, which is not more than one year after having been discharged or released from active duty in the U.S. military.

Long-term unemployed veterans with service-connected disabilities: Section 261(a) of the Act gives an employer a tax credit of 40% of a veteran’s first $24,000 of wages (up to a $9,600 credit), who (1) is entitled to compensation for a service-related disability and (2) during the one-year period before his hiring date, he endured aggregate periods of unemployment of six months or more.

To find the corresponding internal revenue codes for these sections of the act, see “New Federal Law Gives Employers Monetary Incentives to Hire Unemployed or Disabled Veterans.”

{ 1 comment… read it below or add one }

Mike OMeara wrote onDecember 19, 2011 at 2:08 pm

YES Wounded warriors deserve our support! VeteransDirectory.com AKA The “Wounded Warrior Directory” is a directory of over 5000 disabled veteran businesses that deserve our support. Please help us in this mission to promote and support Service Disabled Veteran Owned Small Businesses by linking to Veterans Directory,grabbing one of our banners or badges and let your site visitors and friends know you support this cause. Thank you!!

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