VETERAN'S OPPORTUNITY TAX CREDITS FOR EMPLOYERS
The Work Opportunity Tax Credit (“WOTC”) is a Federal tax credit incentive available to private-sector businesses that hire individuals who face significant barriers to employment. The main objective of this program is to enable these individuals to gradually move from economic dependency to self-sufficiency. Employers that hire from selected targeted groups are compensated by being able to use the WOTC to reduce their federal income tax liability. Tax savings (WOTC) ranges from $1,200 to $9,600 per qualified employee depending on the qualifying targeted group.
On November 21, 2011, President Obama signed into law the Vow to Hire Heroes Act of 2011. The “Returning Heroes and Wounded Warriors Work Opportunity Tax Credits,” amended and expanded the definition of the WOTC’s Veteran targeted groups.
The Vow to Hire Heroes Act of 2011 includes the following provisions:
- Extends the current targeted group to Veterans receiving Supplemental Nutrition Assistance Program (“SNAP”);
- Extends the current targeted group to Veterans with a service-connected disability;
- Extends the current targeted group to Veterans with a service-connected disability, unemployed for at least 6 months;
- Establishes a new targeted group for unemployed Veterans; and
- Qualified tax-exempt (i.e., 501(c)) organizations can now participate by hiring qualified veterans and are now eligible to claim the WOTC.
The Vow to Hire Heroes Act does not extend any of the other (non-Veteran) WOTC targeted groups, which expired on December 31, 2010. The changes and new provisions in this Act apply only to individuals who begin to work for an employer on or after November 22, 2011 and before January 1, 2013.
The expired Unemployed Veteran and Disconnected Youth WOTC targeted groups were introduced through the American Recovery and Reinvestment Act of 2009 for workers hired on January 1, 2009 through December 31, 2010. Please note, the IRS has been instructed to continue accepting applications for these expired targeted groups but to restrain from issuing certifications or denials pending further legislative action regarding extensions. SingerLewak will prepare an update as soon as new WOTC legislation is available.
If you have any questions as to how the new WOTC rules can help benefit your company, please do not hesitate to contact us immediately. SingerLewak can assist you in determining whether your company qualifies for benefits under the reviewed WOTC rules, completing the required WOTC forms, and prepare the tax credit calculation to help reduce the company’s cost of doing business.
Contact Us
As always, please call if you would like to discuss any of these items further.
Your Tax Partners,
 Mark G. Cook, Partner
Steven J. Cupingood, Partner
Dan B. Faulk, Partner
Richard A. Linder, Partner
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Donald G. Leve, Partner
David Neighbors, Partner
Todd Northrup, Partner
Javier Ramirez, Partner |
Lior Temkin, Partner
Thomas E. Wendler, Partner
Jon Widdowson, Partner
Michael Wu, Partner
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