If you run a small business (or any business, really), hiring can be a major issue. The balancing act between bringing on the best people and not going over your personnel budget can be tough, especially when you count the costs of on-boarding, training and dealing with turnover. But one area where you can count on saving at least some money is when you hire veterans. Aside from potentially bringing many strong qualities to a job, like leadership, teamwork, loyalty and a good work ethic, veterans also bring several tax benefits to their employer when they are hired. If you’re wondering “do I get tax credits for hiring veterans?” the answer is yes, you do.
There are a few different credits that you can qualify for, depending on the situations of the veterans you hire. For instance:
- The Returning Heroes Tax Credit covers veterans who have recently been unemployed. This credit gives you a 40% wage credit, applicable two ways. If the veteran has been unemployed between four weeks and six months during the last year, the credit applies to their first $6,000 in wages, up to $2400 total. If the veteran has been unemployed longer than six months during the last year, the credit applies to their first $14,000 in wages, up to $5600.
- The Wounded Warrior Tax Credit works with veterans with service-related disabilities. It also gives a 40% wage credit depending on the veteran’s situation: 40% of the first $12,000 in wages, up to $4800, if the veteran is hired within the first year after leaving military service; 40% of the first $24,000, up to $9600, if the veteran has been unemployed for more than six months.
- The Differential Wage Payment Credit is for companies who employ Reserve and National Guard soldiers who go on active duty for over 30 days after being employed by you for at least 90 days. If you pay these soldiers while they are on active duty, you are eligible for a $4,000 tax credit.
Additionally, there are quite a few states (39 as of this writing) that sponsor supplemental tax credits for hiring veterans through what are called Enterprise Zone Projects. Check with your state to see if it offers these credits. And while these aren’t tax benefits per se, there are also several employment initiatives offered through the Department of Veterans Affairs that can get you reimbursements for instructing, training and providing hands-on employment experience to veterans for at least six months.
So if their outstanding service to our country and their potential to bring excellent qualities of work to their jobs isn’t enough to tempt you to consider hiring veterans, these additional tax credits might help quite a bit. Of course, all of the credits require special forms and paperwork to be filed and in order (this is the IRS, after all), so make sure you have a good tax attorney and accountant ready to handle them.