Employers may want to consider the Work Opportunity Tax Credit (WOTC) for new hires as we honor our veterans today. WOTC is a federal income tax credit available to employers that hire individuals from targeted groups that have traditionally faced barriers to employment. The Veterans Opportunity to Work to Hire Heroes Act of 2011 (“VOW to Hire Heroes Act”) expanded the tax credit for veterans and the Protecting Americans from Tax Hikes of 2015 (“PATH Act”) extended WOTC through December 31, 2019. A qualified veteran is a veteran certified as any of the following:
- A member of a family enrolled in the Supplemental Nutrition Assistance Program (SNAP or “food stamps”) for at least a 3-month period during the 15 months prior to the hiring date;
- Unemployed for a period totaling at least 4 weeks (whether or not consecutive) but less than 6 months in the one-year period ending on the hiring date;
- Unemployed for a period totaling at least 6 months (whether or not consecutive) in the one-year period ending on the hiring date;
- Entitled to compensation for a service-connected disability and hired within a year after being discharged from active duty; or
- Entitled to compensation for a service-connected disability and unemployed for a period totaling at least 6 months (whether or not consecutive) in the one-year period ending on the hiring date.
Employers receive a credit in the range of $2,400 to $9,600 per employee depending on the category, hours worked, and wages paid.
WOTC is also available to tax-exempt organizations described in IRC § 501(c). These organizations may claim the credit against the employer’s portion of Social Security tax by hiring qualified veterans. Please do not hesitate to contact us if you have any questions or if we can be of assistance.