When planning for new hires in 2012, consider the benefits of hiring a veteran. Not only are you supporting someone who made personal sacrifice for the country, your tax-exempt organization may also be able to claim a Work Opportunity Tax Credit against the employer share of social security tax. Here are a few parameters for the credit:
– The employee must be a qualified veteran and must begin work after November 22, 2011 and prior to January 1, 2013.
– The maximum credit available to tax-exempt organizations per qualified employee is $6,240.
– Amount of credit depends on length of veteran’s unemployment prior to your employment, number of hours worked, and amount of first year wages.
For employees hired between November 22, 2011 and May 22, 2012, you have until June 19, 2012 to file the Pre-screening Notice and Certification Request (Form 8850). After May 22nd, you have 28 days from the employee’s first day of work to file Form 8850 and assure qualification.
After certification is received, you claim the credit by filing Form 5884-C, the Work Opportunity Credit for Qualified Tax-Exempt Organizations Hiring Qualified Veterans. Just to be safe, file the normal amount of employment tax for the period you are requesting credit because the forms are processed separately.
For more information, see the VOW to Hire Heroes Act FAQs on the IRS Web site.