Hire a Veteran, Save On Taxes
The U.S. troop count in Iraq is expected to reach 140,000 by July, and force levels in Afghanistan will increase from the 28,000 currently deployed to 32,000 – the highest numbers since that war began in October 2001. There is no current timetable when we’ll start to withdrawal the troops, but there is a way to offer support upon their return, and it’s a veritable win-win for small businesses and soldiers a like.
“There are Federal tax credits available, and they can have a significant impact for businesses filing taxes,” says Nancy Steffens, from the Connecticut department of labor. But surprisingly, few businesses take advantage of these money-saving hiring incentives. According to Blake Christian, CPA and co-founder of the National Tax Credit Group, nationwide credits are claimed by only 10% of eligible businesses, despite the fact these tax credits are worth roughly three times more than a tax deduction. With the federal tax rate for corporations at 35%, a $3,000 deduction translates to only a $1050 benefit after taxes. But a $3,000 credit reaps a $3,000 reward, making a credit considerably more valuable, especially for businesses hiring multiple veterans.
In 2007, the Work Opportunity Tax Credit Program (WOTC) expanded its eligibility requirements and increased the available tax credit to businesses from $2,400 to $4,800. Veterans who receive food stamps for at least three consecutive months in the 15 months prior to employment are eligible, as well as any vet who has sought either physical or psychological rehabilitation because of a service related injury. Additionally, veterans living in one of 408 designated rural renewal counties from 32 states are WOTC eligible. “The business doesn’t have to be in the same rural renewal county, but can be in a metropolitan city and draw people from the rural county,” says Christian. “That really liberalizes the WOTC program.” And, if an employee received welfare benefits before becoming starting work, the Federal Welfare-to-Work program offers business a credit up to $8,500 during a two-year employment period.
