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IRS Gives Guidance On Veterans Tax Credit
Source:
tax-news.com
- Feb 15, 2012
by Mike Godfrey, Tax-News.com, Washington
13 February 2012
The United States Internal Revenue Service (IRS) has released the guidance and forms that employers can use to claim the newly-expanded tax credit for hiring veterans.
The VOW to Hire Heroes Act of 2011, enacted on November 21 last year, provides an expanded Work Opportunity Tax Credit (WOTC) to businesses that hire eligible unemployed veterans and for the first time also makes the credit available to certain tax-exempt organizations.
The IRS confirmed that the WOTC can be as high as USD9,600 per veteran for for-profit employers, or up to USD6,240 for tax-exempt organizations. The amount of the credit depends on a number of factors, including the length of the veteran’s unemployment before hire, the hours a veteran works and the amount of first-year wages paid. Employers who hire veterans with service-related disabilities may be eligible for the maximum credit.
Normally, an eligible employer must file the appropriate form with the state workforce agency within 28 days after the eligible worker begins work. However, according to the guidance from the IRS, employers have until June 19, 2012, to complete and file the newly-revised form for veterans hired on or after November 22, 2011, and before May 22, 2012. The 28-day rule will again apply to eligible veterans hired on or after May 22, 2012.
Businesses claim the credit on their income tax return. In an effort to streamline the certification requirements, IRS has also clarified and expanded upon its guidance to facilitate employers’ use of electronic signatures. The guidance confirms that employers can transmit the form electronically or by fax, subject to the ability of the state workforce agencies to accept submissions in those formats.
The IRS expects the US Department of Labour to issue further guidance to the state workforce agencies providing further clarification.
Category: IRS
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