Wednesday, January 14, 2015

State Tax Credits for Hiring Veterans

The benefits of hiring a veteran are many – they possess an accelerated learning curve, leadership skills, the ability to work well in a team, a respect for procedures, and give efficient performance under pressure, just to name a few. But did you know that your company could receive a tax credit for hiring a military veteran?

In addition to the federal tax credits which were retroactively extended for 2014 last month, there are many states that have implemented monetary benefits for hiring veterans. Check the list below to see if your state has tax credits that you could be taking advantage of by hiring a veteran today.

Alabama – Heroes for Hire Income Tax Credit – Provides a $1,000 tax credit for job creation to employers who hire recently deployed, and now discharged, unemployed veterans. The credit also creates up to $2,000 nonrefundable income tax credit to recently deployed, and now discharged, unemployed veterans who hold at least 50 percent ownership interest in a start-up business.

Alaska – Veteran Tax Credit – Provides $3,000 for a disabled veteran and $2,000 for a veteran who is not disabled. The veteran must have been unemployed for more than four weeks and have been discharged or released from military service less than 10 years before the date employment begins for a veteran who is disabled; or less than two years before the date employment begins for a veteran who is not disabled. The veteran must also be employed in the state for 1,560 hours or more during 12 consecutive months immediately following the date the veteran is first employed.

For a veteran employed in the state for 500 hours or more in a seasonal position during the three consecutive months immediately following the date the veteran is first employed by an employer in a seasonal position, a $1,000 credit is available.

Arizona – Provides a one-time state income tax credit of up to $2,000 for every unemployed veteran employers hire, with a $4,000 credit for a disabled veteran. Source

California – California Enterprise Zone (EZ) Program – Provides a payroll tax credit for employers located within boundaries of a defined Enterprise Zone within a given state. Businesses can reduce state taxes by a portion of wages paid to employees for up to five years.

Delaware – Veteran’s Opportunity Tax Credit – Offers employers the ability to receive $1,500 for each veteran hired for three years. The hiring must take place between Jan. 1, 2012 and Jan. 1, 2016. The veteran must have received an Afghanistan Campaign Medal, Iraqi Campaign Medal, or the Global War On Terrorism Expeditionary Medal.

Florida – Florida Veterans Employment Act – Allows a business to qualify for a one-time corporate income tax credit of $5,000 for each veteran the business hires. A business may qualify for an additional one-time $5,000 corporate income tax credit for hiring a veteran with a service-connected disability. The credit will expire June 30, 2019.

Illinois – Veteran’s Tax Credit – Employers can earn an income tax credit up to $5,000 annually for hiring veterans or Operation Enduring Freedom, or Operation Iraqi Freedom. The credit is 20 percent of the total wages paid up to $5,000 to every qualified veteran hired after July 1, 2012. Employers can also earn an income tax credit up to $1,200 annually for hiring veterans of Operation Desert Storm, Operation Enduring Freedom, or Operation Iraqi Freedom. The credit is 10 percent of the total wages paid to every qualified veteran hired after Jan. 1, 2010. Veterans must work at least 185 days during the tax year for the employer to qualify for the Veteran’s Tax Credit.

Missouri – Show-Me Heroes On-the-Job-Training – Reimburses employers 50 percent of wages up to 1,040 hours while the veteran is being trained to offset the cost of onboarding.

New Mexico – Veteran Employment Tax Credit – Provides up to $1,000 to businesses each time they hire a veteran who has recently been discharged from the military.

New York – Hire-A-Vet Credit –Businesses may earn up to $5,000 for hiring a qualified veteran, and up to $15,000 for hiring one who is disabled. It is a one-time credit applied against the 2015 and 2016 franchise tax years; any credit not used by an employer can be carried over for three years. Businesses must employ a qualified veteran no less than 35 hours per week for one full year. Qualified veterans must attest that they were not employed for 35 or more hours in the previous 180 days. A qualified veteran is someone who served on active duty in the Army, Navy, Air Force, USMC, Coast Guard, Reserves, National Guard, NY Guard or NY Naval Militia and was released from active duty by general or honorable discharge after September 11, 2001.

Oklahoma – Oklahoma Quality Jobs Program – Provides up to six percent rebate if at least 10 percent of new payroll is comprised of qualified military veterans.

Utah – Veteran Employment Tax Credit – A non-refundable monthly credit of $200 (year maximum of $2,400) in the first year, and $400 monthly credit (year maximum of $4,800) in the second year is available to employers who hire a qualified recently deployed veteran on or after January 1, 2012.

Vermont – Tax Credit for Hiring a Veteran with Recent Military Service – Provides up to $2,000 for hiring a recently transitioned Vermont veteran.

Washington – Tax credits are provided to businesses that provide full-time jobs to qualified military veterans who have been unemployed for at least 30 days. The credit is equal to 20 percent of the wages and benefits paid up to $1,500. The measure will go into effect on Oct. 1, 2016. Source

West Virginia – Military Incentive Credit – Provides 30 percent of the first $5,000 of compensation paid to a veteran. If the veteran was a member of the reserve or WV National Guard, the credit equals 25 percent of the first $5,000 of compensation. The credit equals the percentage of disability suffered by the veteran, multiplied by the first $5,000 of compensation.

PLEASE NOTE: Orion ICS, LLC, its affiliates and its employees are not in the business of providing tax or legal advice to any taxpayer. This content is for general information purposes only, and is not intended or written to be used without the advice of the taxpayer’s independent tax advisor. Thank you for reading about tax credits for hiring veterans.

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