Businesses can receive up to $9,600 in tax credits for hiring unemployed veterans.
This week, many veterans and their families will be giving thanks for just being home. With the majority of troops home from the wars in Iraq and Afghanistan, more soldiers will be celebrating Thanksgiving in the United States.
While thankful to be home, many former soldiers who left the military upon returning home are not celebrating new jobs. The sluggish economy and high unemployment mean a tough job hunt in the civilian workforce. The Obama administration and Congress are hoping a tax credit that is part of the American Jobs Act will help unemployed veterans and small businesses at the same time.
The Returning Heroes Tax Credit provides businesses that hire unemployed veterans with a maximum credit of $5,600 per veteran, and the Wounded Warriors Tax Credit offers businesses that hire veterans with service-connected disabilities with a maximum credit of $9,600 per veteran. Congress passed both measures apart from the American Jobs Act last week and President Barack Obama signed them into law on Monday.
Returning Heroes Tax Credit
The Returning Heroes Tax Credit provides a new credit of 40 percent of the first $6,000 of wages (up to $2,400) for employers that hire veterans who have been unemployed at least four weeks. Businesses can receive a credit of 40 percent of the first $14,000 of wages (up to $5,600) for hiring veterans who have been unemployed longer than six months.
Wounded Warrior Tax Credit
The Wounded Warrior Tax Credit doubles the existing tax credit for long-term unemployed veterans with service-connected disabilities. Under the existing Work Opportunity Tax Credit for veterans with service-connected disabilities, employers can receive up to a $4,800 credit for hiring service-disabled veterans. The new law allows a maximum credit of $9,600 (40 percent of the first $24,000 of wages) for companies that hire veterans with service-connected disabilities who have been unemployed longer than six months.
When he signed the bills, President Obama said, “Today, because Democrats and Republicans came together, I’m proud to sign those proposals into law. And I urge every business owner out there who’s hiring to hire a veteran right away. “
At 7.7 percent, the unemployment rate among all veteran groups is actually lower than the 9 percent overall unemployment rate, according to the Bureau of Labor Statistics. However, start segmenting the veterans and the rates climb. For veterans who have served since 2001, the unemployment rate was 12.1 percent in October. The unemployment rate for veterans ages 18-24 was 30.4 percent in October, versus 15.4 percent overall. Nearly half (48.3 percent) of Black veterans ages 18-24 were unemployed in October, compared to 24.9 percent overall.
“While we’ve added more than 350,000 private sector jobs over the last three months, we’ve got 850,000 veterans who can’t find work,” Obama said. “And even though the overall unemployment rate came down just a little bit last month, unemployment for veterans of Iraq and Afghanistan continued to rise. And that isn’t right. These men and women are the best that America has to offer. They are some of the most highly trained, highly educated, highly skilled workers that we have.”