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, its rate of new hires, and the average wages paid to employees, tax credits could easily equal tens of thousands of dollars per year for employers. 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.
- A veteran who has 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.
Tax Breaks for Hiring Veterans Have Been Extended
Two significant tax credit programs under the WOTC program were recently extended 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 equaling 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 while helping these 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 is why it is important to ensure that the most current forms and screening questions are always used in hiring. The easiest way to do this is by automated the onboarding process. That way, all potentially qualifying new hires can be readily identified and started 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 a credit for their businesses.
The simple Efficient Hire WOTC screening process helps ensure that employers don’t miss out on available credits and tax breaks for hiring veterans. To learn more and request a demo, contact our team today!