Today the IRS released new guidance on the tax relief available to employers who hire veterans.
The Work Opportunity Tax Credit was made available under the VOW to Hire Heroes Act of 2011. For-profit employers may qualify for a credit of up to $9,600 per veteran hired. The actual amount of the credit depends on how long the veteran was unemployed before being hired and a whole host of other factors. A veteran who is hired after being unemployed for 2 years is worth more than one who took a 6-week vacation between jobs.
So what’s new with the credit?
- Now certain tax-exempt organizations may qualify for the tax credit ($6,240 max).
- Form 8850 — the form used to collect pertinent details about the veteran job applicant — previously had to be filed within 28 days after the veteran hire date, but now the rule is the form must be filed by June 19, 2012 for veterans hired before May 22, 2012.
- Employers can submit Form 8850 electronically or by fax.
Business use Form 5884 to claim the credit and tax-exempt organizations use Form 5884-C. For more information, see the IRS website.