The Senate unanimously passed legislation yesterday that expands and extends the veteran portion of the Work Opportunity Tax Credit (WOTC), increasing the value of the credit for hiring eligible veterans and extending it through 2012. The House of Representatives is expected to pass the bill next week, and President Obama will likely sign it into law soon thereafter.
The amount of the credit will range from $2,400 to $9,600 per eligible hired veteran, and it will be available through December 31, 2012.
The bill does not extend the core WOTC program, but it includes the following provisions for businesses that hire military veterans:
- For a veteran who is entitled to compensation for a service-connected disability and who has a hiring date which is not more than one year after having been discharged or released from active duty, the amount of the wages subject to credit is $12,000 – potentially a $4,800 credit.
- For a veteran who is unemployed for at least six months during the year prior to being hired, the amount of wages subject to the credit is $14,000 – potentially a $5,600 credit.
- For a veteran who is entitled to compensation for a service-connected disability and is unemployed for at least six months during the year prior to being hired, the amount of wages subject to the credit is $24,000 – potentially a $9,600 credit.
- For a veteran who is unemployed for at least four weeks during the one-year period prior to being hired, the amount of wages subject to the credit is $6,000 – a credit of $2,400.
The amendment also includes a “simplified certification system” which requires the state work force agency (SWA) to certify that the veteran received unemployment compensation for the statutory periods of unemployment that are listed for each category. Note that the language used specifically mentions the SWAs, an integral part of the national WOTC infrastructure, as the certifying agency.
We will continue to monitor the bill as it reaches the House and White House, and we will keep you abreast of any changes. For more information on this or any other tax issue, contact me or your Barnes Dennig tax representative.