New Law Gives Tax Credit to Businesses Hiring Veterans
Great news for businesses and veterans! President Obama signed into law a bill passed by Congress last month granting tax credits to businesses if they hire veterans. This incentive ranges from $2,400 to as high as $9,600. This law augments the earlier efforts of the President and First Lady who got pledges from businesses, the U.S. Chamber of Commerce and the International Franchise Association to hire 100,000 veterans or their spouses by 2014. Businessweek.com highlighted the major provisions of the new law.
President Barack Obama signed into law a measure that provides tax credits to companies that hire unemployed veterans and repeals a requirement that federal, state and local governments begin withholding 3 percent of payments to contractors in 2013.
Obama, at a ceremony for the signing, said about 1 million veterans will be entering the civilian workforce over the next five years as the war in Iraq winds down. He said businesses recognize that the work experience they gain while in the service are valuable to private enterprise.
Companies can claim a credit against taxes owed of as much as $5,600 for hiring veterans, and as much as $9,600 for hiring veterans with service-connected disabilities, if the veteran has been looking for work for six months or longer.
The new law also provides as much as $2,400 for hiring a veteran who has been looking for work for one to six months.
The tax credits are part of a measure that also repeals a requirement that federal, state and local governments begin withholding 3 percent of payments to contractors in 2013. The Senate and House passed the legislation on Nov. 10 and Nov. 17 respectively.
The tax credits for hiring veterans will cost the Treasury $95 million over a decade and other veterans programs in the bill will cost $152 million, according to the Congressional Budget Office.
The unemployment rate for military veterans who joined the service since the Sept. 11 terrorist attacks was 12.1 percent in October, according to the Labor Department.
To further encourage hiring veterans, the government can pay employers for providing on-the-job training to veterans who haven’t been rehabilitated, up to the point of employability.
The measures augment separate efforts by the president and first lady Michelle Obama to win pledges from businesses to hire veterans and their spouses.
That has led to agreements by the U.S. Chamber of Commerce and the International Franchise Association to hire 100,000 veterans, wounded warriors and military spouses by 2014.
Companies that have made the pledge include Microsoft Corp. and Home Depot Inc.
Kmart, a unit of Sears, and Sam’s Club, a unit of Wal-Mart Stores Inc., have promised the administration that if a military spouse working at one of their stores must move, “they will do their very best to have a job waiting for them when they arrive,” Michelle Obama has said.
In addition, the Obamas’ challenge has led job search companies such as Simply Hired and Monster.com to offer veterans and military spouses help with job openings, based on their location and skills.
Photo by americans4financialreform