President Obama recently proposed the American Jobs Act. As part of that proposal is an initiative for "returning heroes" tax credit for hiring veterans. It is not clear what the specific requirements would be for this credit or if this will be part of any type of package Congress passes.
Currently companies can receive a credit for hiring qualified veterans through the Work Opportunity Tax Credit. This credit was implemented to incentivize private companies to place individuals from 'targeted groups" on their payroll. Currently, the Work Opportunity Tax Credit is set to expire at the end of 2011.
One of those targeted groups in The Work Opportunity Tax Credit is veterans.
Currently when a private company hires a veteran and places that individual on the comapny's payroll they can receive up to a maximum credit of $2,400 for each new "qualified" veteran hired. If a veteran became disabled while serving, that credit can increase up to a maximum of $4,800 for each new "qualified" disabled veteran hired.
A "qualified veteran" is:
One discharged or released from active duty in the US Armed forces at any time during the 5-year period ending on the hiring date and received unemployment compensation for at least 4-weeks during the 1-year period ending on the hiring date.
A veteran who is a member of family that is receiving or recently received food and nutrition benefits (food stamps) for at least 3 months during the past 15 months
In President Obama's proposal, the amount that could be claimed for a "qualified" veteran would increase to as much as $5,600 per new veteran hired and $9,600 for a "qualified" disabled veteran"
It is too early to determine or even begin to predict if this will pass Congress and if it does whether the current requirements defining a "qualified veteran" will change or remain the same.
For more information regarding the Work Opportunity Tax Credit, download our Work Opportunity Tax Credit Guide.