As Americans, we should all celebrate veterans and take time to say “thanks” to all who bravely serve our country and put their lives on the line to protect our freedoms. It is entirely fitting that we celebrate veterans during the same month as the Thanksgiving holiday, because the brave men and women that have sacrificed so much for us should be at the top of our list of things for which we are thankful.

For employers, Veteran’s Day need not be just one day out of the year. Employers in all industries are encouraged to hire veterans whenever possible. Toward that end, the federal government offers a series of tax breaks to provide further incentive to give our men and women in uniform a chance to earn a good living after they return home from duty.

Tax Credits Available for Employers that Hire Veterans

In 2011, Congress passed the Vow to Hire Heroes Act of 2011, which expanded the Work Opportunity Tax Credit and provided some nice incentives for employers who choose to hire veterans and individuals from other targeted groups that face barriers to employment. There is no limit to the number of individuals employers can hire from these groups. Here are some of the incentives available:

• Individuals Receiving Short-Term Unemployment: For those that have been receiving unemployment compensation for at least four weeks, a 40% credit for the first $6,000 in wages ($2400 maximum) is available during the first year of employment.

• Individuals Receiving Long-Term Unemployment: Employers hiring targeted individuals that have received unemployment compensation for more than six months can receive a credit of up to 40% of the first $14,000 in wages ($5,600 maximum) during the first year of employment.

• Disabled Veterans: A Work Opportunity credit of up to 40% of the first $12,000 in wages ($4,800 maximum) is available during the first year of employment for employers hiring veterans that have service-connected disabilities.

• Disabled Veterans Receiving Long-Term Unemployment: A Work Opportunity credit of up to 40% of the first $24,000 in wages ($9,600 maximum) is available during the first year of employment for employers hiring a veteran with a service-connected disability who has also received unemployment for longer than six months.

To qualify for the 40% credit, the employee must work at least 400 hours during the tax year. However, if the employee works at least 120 hours but less than 400, the employer can still claim a credit of 25% of the employee’s wages up to the maximum credit amount.

Work Opportunity Tax Credit Renewal Update

The current round tax breaks for hiring veterans and other targeted groups expired on December 31, 2013 and Congress has not taken action to renew these credits. However, it is expected that they will be taken up during the lame duck session, which runs from mid-November to mid-December. In the past, when Congress has renewed these credits, they have done so retroactively. To stay up to date on the latest changes with these and other tax credits your business may qualify for, contact BASC Expertise, your trusted Mesa accountant.