Hiring Our Heroes
Many returning veterans have difficulties finding work after returning from being deployed. According to figures released by the Bureau of Labor Statistics (BLS) in March 2016, total unemployment among Gulf-War Era II veterans (deployed since September 2001) was 5.8 percent in 2015. Unemployment for all veterans was 4.6 percent in 2015.
Female veterans registered a 5.4 percent unemployment rate while the unemployment rate for male veterans was 4.5 percent. In total, 495,000 veterans were unemployed in 2015, with 57 percent of those being age 45 or over. Thirty-seven percent of unemployed veterans were age 25 to 44 and 5 percent were age 18 to 24.
While these figures generally reflect improvement over unemployment figures for the previous year, this still represents a lot of untapped potential. Tapping into that potential could yield significant tax breaks benefits for your company while enhancing the bottom line.
Federal Tax Credits for Hiring Veterans
The Work Opportunity Tax Credit (WOTC), the Returning Heroes Tax Credit and the Wounded Warrior Tax credit are federally administered income tax credits. Claiming one or more of these credits can reduce an employer’s federal income tax liability by 40 percent of the first year’s wages for each eligible veteran placed on the payroll. Depending on the status of the veteran hired and his or her disabled status, the credit can be as much as 9,600 dollars for each hire.
Actual tax credit amounts vary according to the status of the veteran hired. Under the WOTC program, hiring veterans receiving SNAP benefits (food stamps) yields a credit to employers of 2,400 dollars. The Returning Heroes Tax Credit yields 2,400 dollars for hiring veterans who have been unemployed for at least 4 weeks and 5,600 dollars for hiring veterans who had been previously unemployed for at least 6 months.
According to the BLS, approximately one-third of all Gulf-War Era II veterans reported suffering from service-related disabilities in 2015. Disabled veterans, like the general disabled population, suffer higher unemployment rates than their able-bodied counterparts. However, disabled veterans often receive intensive rehabilitation to help them deal with their injuries. In addition, advances in assistive technologies and a shift in attitude away from viewing disabled individuals as helpless has allowed many disabled veterans to re-enter the civilian workforce.
The Wounded Warrior Tax Credit provides a substantial financial incentive for employers to hire veterans with service related disabilities. Hiring veterans with a service related disability within 1 year after their release date from active duty yields a 4,800 dollar credit. Employers who hire veterans with service related disabilities who have been unemployed for at least or six months during after completing active duty receive tax credits of 9,600 dollars per new hire.
Claiming Tax Credits for Hiring Veterans
Employers claim these tax credits by completing either IRS Form 8850 on the day a job offer is made. Employers hiring veterans belonging to WOTC target group must also file ETA Form 9061 or ETA Form 9062 within 28 days of the employee’s start date, along with IRS Form 8850. If neither ETA Form 9061 nor ETA Form 9062 applies to the new hire, IRS Form 8850 should be filed alone after 28 days.
There are no limits placed on the number of employees for which employers can claim these credits. In addition if your company holds tax exempt status, you may also be eligible to receive a credit against your company’s share of Social Security taxes for eligible employees.
Skills Veterans Bring to the Workplace
Besides receiving federal income tax breaks, savvy employers realize that hiring veterans is also good business. Veterans are often highly trained in areas that translate directly to the civilian workplace. Moreover, their training is often obtained using cutting edge technology.
Veterans – whether able bodied or disabled also possess a number of so-called “soft” skills, including leadership, discipline, teamwork and experience with dealing with diverse individuals and cultures. These “soft” skills, matched with practical training and experience, are especially valuable in the 21st century workplace.
As an employer, you can do more than thank our nation’s heroes with words. The next time you have a job opening, give serious consideration to hiring a veteran. You’ll gain the services of someone who knows the value of a job well done – and is likely to perform well for your company.
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Posted In: Management
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