Act now to get tax credit for hiring a veteran
Tuesday, June 12th, 2012
Did you recently hire an unemployed veteran? Make sure you secure your tax credit now. The IRS provides this information:
Employers that hired unemployed veterans during late 2011 and early 2012 had an expanded period to request the required certification for claiming the expanded Work Opportunity Tax Credit (WOTC). That expanded period ends on Tuesday, June 19.
The IRS is reminding employers that for eligible veterans hired on or after Nov. 22, 2011 and before May 22, 2012, they have until June 19 to file certification forms with state workforce agencies.
Here are some important points to know about the credit and upcoming deadline:
• New rules provide for an expanded WOTC to employers that hire eligible unemployed veterans.
• The credit can be as high as $9,600 per veteran for for-profit employers or up to $6,240 per veteran for tax-exempt organizations.
• The amount of the credit depends on a number of factors, including the length of the veteran’s unemployment before hiring, the hours the veteran works and the amount of first-year wages paid.
• Employers hiring veterans with service-related disabilities may be eligible for the maximum credit.
• Normally, an eligible employer must file Form 8850, Pre-Screening Notice and Certification Request for the Work Opportunity Credit, with their state workforce agency within 28 days after an eligible worker starts work. But under a special rule employers have until June 19, 2012, to file this form for veterans hired on or after Nov. 22, 2011, and before May 22, 2012.
• The 28-day rule for timely filing applies for eligible veterans hired on or after May 22, 2012, and before Jan. 1, 2013.
• Form 8850 can be faxed or electronically transmitted to the state workforce agency, as long as the agency is able to receive the certification forms that way.
• For-profit employers claim the credit on their income tax return using Form 5884, Work Opportunity Credit, and Form 3800, General Business Credit.
• Tax-exempt organizations follow a separate claim procedure using Form 5884-C, Work Opportunity Credit for Qualified Tax-Exempt Organizations Hiring Qualified Veterans.
For assistance with the expanded WOTC, please call us.