Can your business use a hefty tax credit? Thanks to the federal Work Opportunity Credit (WOTC), you could qualify for a credit of up to $9,600 per veteran if you hire an eligible vet by the end of the year. Of course you will need to move quickly to make it happen.

1. Toll Free: 877.880.4477
Phone: 281.880.6525
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Save Taxes By Hiring a Veteran Before
the Opportunity Vanishes

2. Can your business use a hefty tax credit? Thanks to the federal Work
Opportunity Credit (WOTC), you could qualify for a credit of up to $9,600 per
veteran if you hire an eligible vet by the end of the year. Of course you will
need to move quickly to make it happen.
Background: The WOTC, created by Congress during the depths of the
financial crisis, was supposed to expire last year. Earlier in 2013 it was
extended until the end of this year. The law's original purpose was to
stimulate employers like you to hire disadvantaged individuals and veterans.
The only part of the law that was extended was the component applicable to
vets.
The size of the tax credit varies according to the veteran's circumstances, his
or her wages on your payroll, and the duration of employment. The IRS table
below lays out the basics. The credit is applied against normal business
income on IRS form 3800. It is subject to the same carry-back and carry-
forward rules applicable to other credits.
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3. Category of Qualified Veteran being
hired by taxable employer before
1/1/14
Worked at least 120 hours
but less than 400 hours as of
the date Form 5884 is filed
Worked at least 400
hours as of the date
Form 5884 is filed
Veteran certified as being a member of a
family receiving assistance under a
supplemental nutrition assistance
program under the Food and Nutrition
Act of 2008, for at least a 3-month
period ending during the 12-month
period ending on the hiring date.
Max Credit:
25% of $6,000 of first-year
wages (up to $1,500)
Max Credit:
40% of $6,000 of first-
year wages (up to
$2,400)
Veteran certified as having aggregate
periods of unemployment of at least 4
weeks but less than 6 months in the
year prior to being hired.
Max Credit:
25% of $6,000 of first-year
wages (up to $1,500)
Max Credit:
40% of $6,000 of first-
year wages (up to
$2,400)
Disabled veteran who is certified as
having a hiring date which is not more
than 1 year after discharge or release
from active duty.
Max Credit:
25% of $12,000 of first-year
wages (up to $3,000)
Max Credit:
40% of $12,000 of first-
year wages (up to
$4,800)

4. Veteran certified as having aggregate
periods of unemployment of 6 months
or more in the year prior to being hired.
Max Credit:
25% of $14,000 of first-year
wages (up to $3,500)
Max Credit:
40% of $14,000 of first-
year wages (up to
$5,600)
Disabled veteran who is certified as
having aggregate periods of
unemployment of 6 months or more in
the year prior to being hired.
Max Credit:
25% of $24,000 of first-year
wages (up to $6,000)
* For veterans in this
category hired before
November 22, 2011, the max
credit is 25% of $12,000 of
first-year wages (up to
$3,000)
Max Credit:
40% of $24,000 of first-
year wages (up to
$9,600)
* For veterans in this
category hired before
November 22, 2011, the
max credit is 40% of
$12,000 of first-year
wages (up to $4,800)

5. Defining "Veteran"
First things first: How is a "qualified veteran" defined? Generally it's someone
who has served for at least 180 days on active duty. An exception is made for
service members released from duty due to a service-related injury. Also,
time in basic training doesn't count towards that 180-day minimum.
There is a two-step process required to become eligible for the tax credit --
beyond hiring the veteran or veterans before December 31:
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6. www.hrp.net
Step 1: Fill out a Form 8850 "pre-screening notice and certification request"
questionnaire and submit it to your state employment security agency. The
actual form requires input both from you and the veteran. Ideally you would
complete and send it to your state agency before or when you hire the
veteran. However, the form can be sent in within 28 days of hiring. If your
state agency declines certifying the 8850, it must explain the basis of its
rejection. In theory that opens the door for an appeal if the agency has made
a mistake in rejecting the application
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Step 2: Assuming you get the green light from your state agency, when you
ultimately file your regular business tax return, you include a completed Work
Opportunity Credit Form 5884. But you can elect to make a claim for that
credit with Form 5884 "at any time within three years from the due date or
your return on either your original return or amended return," according to
the IRS. Also, if you are a taxpayer whose only source of this credit is from an
S corporation, you can forget about the Form 5884 and simply report the
credit directly on Form 3800.
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7. Tax-Exempts Can Also Benefit
The tax credit is also available to tax-exempt
employers, but, given the fact those entities
do not pay income tax, the credit is applied
against the employer's FICA obligations.
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You will, naturally, need to consider this
opportunity in light of your overall
workforce needs; tax-saving opportunities
are but one variable in the equation. More
important is whether you actually need to
expand your workforce, and whether a
veteran satisfying any of the five criteria for
tax credit eligibility is available to fill a
specific gap in your employee population, or
a gap that you anticipate will occur not too
long after the end-of-year hiring deadline.

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