If you are looking to hire someone in the very, very near future and a military veteran is a potential candidate then there may be an added incentive to hire him or her. The incentive is the Work Opportunity Tax Credit, or WOTC, which can be as much as $9,600 per veteran for for-profit employers or up to $6,240 per veteran for tax-exempt organizations.
Employers that hired unemployed veterans during late 2011 and early 2012 were given extra time to request the required certification to claim the credit. But that expanded time frame ends on June 19th.
Here are some important points to know about the credit and upcoming deadline:
- 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.
Time is running out to file for the WOTC for those who are eligible, so act quickly and thanks to you all for putting our former military members on your payrolls.
JDKatz, P.C. is a full-service law firm focused on tax law and estate planning. We are dedicated to minimizing your existing liability and risks while providing valuable tax planning to streamline your tax issues in the future. Please call us at 301-913-2948 to schedule an appointment to meet with one of our trusted attorneys.