If you have hired new employees before December 31, 2013 and begin work before January 1, 2014, and some of them were veterans, your business is eligible for a Work Opportunity Tax Credit.
The VOW to Hire Heroes Act of 2011 prolonged the Work Opportunity Tax Credit (WOTC) to qualified veterans and lengthened the WOTC to make a reduced credit available to tax-exempt organizations for hiring qualified veterans.
Before claiming the WOTC on their tax return, all employers must receive and verify certification that the veteran employee was a member of the military. The process for certifying the veterans for this credit is the same for all employers – they have to file Form 8850, Pre-Screening Notice and Certification Request for the Work Opportunity Credit. Some states allow you to file Form 8850 electronically, so check with your state.
The WOTC taps out at $9,600 per employee for business owners who run a taxable business, while the tax credit limit for tax-exempt employers is $6,240 for each eligible employee. If you are a business owner who hired a veteran with disabilities from their time serving in the military, you may be eligible for the maximum tax credit.
Some Things to Consider
The amount of time a veteran was unemployed, the veteran’s hours, as well as their salary for their first year of employment are all contributing factors in the amount of tax credit employers will receive. For more information on the Work Opportunity Tax Credit, visit the IRS website by clicking here.
If you are a business owner and you owe back taxes for previous tax years, it is important to find a tax relief professional with your best interest at heart. Trusted by many, U.S. Tax Shield can advise your company on your tax problems and come up with a tax resolution plan that is tailored to your business’s individual needs.