Employers can get very generous tax breaks for hiring veterans but only if they understand how to screen new hires and file the right documentation in a timely manner. Depending on the size of an organization, rate of new hires, and average wages paid to employees, tax credits could equal tens of thousands of dollars per year for employers. So, it’s worth taking a little time to integrate this information into the hiring process.
What to Look for When Hiring
Examples of individuals who may qualify under the federal WOTC program include:
- A veteran whose family receives food stamps under SNAP for at least 3 months during their first year of employment
- Veterans who have been unemployed for a total of at least 4 weeks or at least 6 months during the one year period prior to the date of hire (The incentive amount varies depending on the length of unemployment.)
- A veteran entitled to compensation for a service-related disability hired within 1 year of the date of discharge or release from active duty
Veterans who fall into multiple categories may qualify an employer for a higher level of tax incentive.
The Government Has Extended Tax Breaks for Hiring Veterans
The WOTC program recently extended two significant tax credit programs through 2019. These are the Returning Heroes and Wounded Warriors credits that apply to unemployed and disabled veterans. These programs offer significant incentives in the form of tax credits to employers. They equal 40% of the first $6,000-$24,000 of wages earned by qualifying individuals. That’s $2,400-9,600 per qualified new hire.
There are also Special Employer Incentive (SEI) programs for training newly hired vets on the job including partial reimbursement for salary and supplies. With this type of opportunity, employers can defray some of the cost of taking on job candidates who may have less experience in a given field. These programs also help veterans become better equipped for future careers.
Get Your Organization on Board and Start Receiving Tax Credits
Like all aspects of IRS regulations, the specifics of WOTCs are always changing. That’s why it’s important to ensure that current forms and screening questions are always used in hiring. The easiest way to do this is by automating the onboarding process. That way, employers can readily identify all potentially qualifying new hires and start on the certification process without delay. There is only a 28 day window for employers to get this right. Otherwise, they miss out on the opportunity to claim tax breaks for hiring veterans for their businesses.
The Efficient Hire WOTC screening process helps ensure that employers don’t miss out on tax breaks for hiring veterans. To learn more and request a demo, contact our team today!