Veterans attempting to return to the work force after military service can face a number of obstacles. Having knowledge of the tax credits employers may be eligible when hiring a veteran, can be a powerful barganing chip when attempting salary negotiations.
The Work Opportunity Tax Credit (WOTC) is a Federal tax credit available to employers for hiring individuals from certain target groups who have consistently faced significant barriers to employment. WOTC joins other workforce programs that incentivize workplace diversity and facilitate access to good jobs for American workers.
WOTC helps targeted workers move from economic dependency into self-sufficiency as they earn a steady income and become contributing taxpayers, while participating employers are able to reduce their income tax liability.
The maximum tax credit ranges from $1,200 to $9,600, depending on the employee hired.
To be considered a veteran eligible for WOTC, an individual must meet these two standards:
- Veterans Target Group
- Have served on active duty (not including training) in the U.S. Armed Forces for more than 180 days or have been discharged or released from active duty for a service-connected disability; AND
- Cannot have a period of active duty (not including training) of more than 90 days that ended during the 60-day period ending on the hiring date.
- To be eligible for WOTC, a veteran must also be one of the following:
- A member of a family that received Supplemental Nutrition Assistance Program benefits (food stamps) for at least 3-months during the 15-month period ending on the hiring date; OR
- Entitled to compensation for a service-connected disability and was
- Unemployed for at least 6 months in the year ending on the hiring date; OR
- Unemployed for:
- At least 4 weeks (but less than 6 months) in the year ending on the hiring date, or
- At least 6 months in the year ending on the hiring date
For more detailed information on the WOTC, please visit the USDOL website