The Work Opportunity Tax Credit (WOTC) is available to employers who hire qualified unemployed veterans. Employers could see a credit worth as much as $9,600 per qualified veteran who start work before January 1, 2013. There are several factors that determine the amount of the credit which include how long the veteran was unemployed before hire, the number of hours the veteran works, and their first-year wages.
Employers must first submit Form 8850, Pre-Screening Notice and Certification Request for the Work Opportunity Credit, no later than 28 days after the employee begins work, to determine if they qualify for the credit. But under a special rule included in IRS Notice 2012-13, employers have until June 19, 2012, to complete and file this newly-revised form for veterans hired on or after Nov. 22, 2011, and before May 22, 2012. The 28-day rule will again apply to eligible veterans hired on or after May 22, 2012. Form 8850 must be sent to both the state employment agency and the IRS for verification. In addition to the Form 8850, business owners are also required to file Form 5884, Work Opportunity Credit, with the business’ tax return for the year in order to claim the credit. Unless Congress takes action this credit is expected to expire on December 31, 2012.
Additional information can be found on the IRS website. If you think your business may be eligible to take advantage of this tax credit and you would like assistance with tax minimization strategies, please email email@example.com.