December 7, 2011
On November 21, the Three Percent Withholding and Job Creation Act (Act) was signed into law. The Act repealed a requirement that three percent of payments be withheld by federal or state governments to any person for services or property. The Act struck the new requirement from the tax code. The Act also improved existing credits and created additional incentives for businesses hiring qualifying veterans.
The Returning Heroes and Wounded Warrior tax credits were established. These credits are available for businesses which hire qualifying veterans who begin work after November 21, 2011.
The Returning Heroes credit provides a credit to businesses for hiring unemployed veterans. Short-term unemployed veteran hires (unemployed for at least four weeks) can generate credits up to $2400 each. Long-term unemployed veteran hires (unemployed longer than six months) can generate credits up to $5600 for each qualifying new hire.
The Wounded Warrior credit extended the existing WOTC credit of up to $4800 for each new qualifying veteran hire with a service-related disability. It also established a new credit of up to $9600 for each qualifying hire of a long-term unemployed veteran with service-related disabilities.
Like other Work Opportunity Tax Credits (WOTC) tax credits, these credits can be obtained for each qualifying hire. Businesses with high turnover and businesses that hire for positions paying $10 per hour or less frequently qualify for WOTC credits. For more information on WOTC credits, and how they may benefit your business, read our article about employment credits.
For more information on how these changes may affect your business, call Baker Milligan today.
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