IRS Extends Business Tax Credits for Hiring Veterans

The Internal Revenue Service has extended the Work Opportunity Tax Credit deadline for hiring qualified veterans of the U.S. Armed Forces through Dec. 31.

The IRS said the American Taxpayer Relief Act of 2012 extends the Work Opportunity Tax Credit for hiring certain workers through the end of the year. The VOW to Hire Heroes Act of 2011 changes parts of the Work Opportunity Tax Credit, to include adding new categories to targeted qualified veterans and expanding the WOTC to give reduced-credit to tax-exempt organizations for hiring qualified veterans.

In addition, the VOW Act extended the WOTC for qualified veterans who were hired before Jan.1, 2013.  However, the VOW Act did not extend the tax credit to other targeted group categories and expired for targeted group members other than qualified veterans hired after Dec. 31, 2011.

ATRA extends the WOTC for qualified veterans hired before Jan. 1, 2014.  ATRA also extends the WOTC for targeted group members, other than qualified veterans, hired after Dec. 31, 2011, and before Jan. 1, 2014, the IRS said.

The IRS said before an employer may claim the WOTC, he or she must certify that an individual is a member of a targeted group. To get certification, employers must file Form 8850, Pre-Screening Notice and Certification Request for the Work Opportunity Credit.

Normally, an eligible employer has to file Form 8850 with his or her respective state workforce agency within 28 days after the eligible worker begins work, the IRS said. However, now there are new special transition rules for taxable and tax-exempt employers.

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-Dana Beyerle