About Me

Orlando, Florida, United States
McCarron Accounting & Consulting was established in 1990 to provide efficient, expert solutions to businesses and individuals. Our primary services include accounting, taxation, and business consulting. We also offer a host of specialty services to cater to the unique needs of our clients. We serve a wide range of individuals, corporations, partnerships, and non-profit organizations and have experience with the accounting issues and tax laws that impact our clients.

Monday, November 28, 2011

Tax credit for hiring "Returning Heroes and Wounded Warriors"

As part of the President's "Jobs" bill endeavor, last week congress passed and the President signed into law the "Returning Heroes Tax Credit" and the "Wounded Warriors Tax Credit". These new tax credits will assist employers that hire "qualified" veterans with a tax break between $2,400 and $9,600 for each qualified veteran hired. The amount of the credit depends, in part, on how long the veteran has been unemployed, and the credit increases to the maximum if the veteran has a qualified service related disability. A tax credit is much better for the employer than a tax deduction. A tax credit reduces your taxes dollar for dollar, whereas a tax deduction only reduces your taxable income.

The goal of the jobs bill is to incent employers to hire the thousands of veterans that have or will be returning from the war. It would be great if the bill reduces the number of veterans on the unemployment line. I'd love to see all veterans gainfully employed after serving our country. Hopefully the next bill will assist other citizens that have been searching for employment as well.

Now for the details of the new tax law.

Employers that hire veterans who have been looking for employment for more than six months may be eligible for a Returning Heroes Tax Credit of up to $5,600 per employee; employers that hire veterans who have been looking for employment for less than six months may be eligible for a credit of up to $2,400 per employee.

Employers that hire veterans with service-connected disabilities who have been looking for employment for more than six months may be eligible for a Wounded Warriors Tax Credit of up to
$9,600 per employee.

Of course both tax credits have strings attached.

1-In addition to the above criteria, the individual must begin after the date the law was passed, November 21, 2011.
2-State workforce agencies must certify that an individual is qualified for the credit.
3-Employers must complete Form 8850 Pre-Screening Notice and Certification no later than 28 days after the date of hire.
4-Other requirements must also be met to qualify for the credit.

This new tax law is meant to be tax neutral, as a number of other laws were changed to increase revenue.

1-Veterans Administration(VA) mortgage applications contain an application fee. These fees were scheduled to be reduced, but the new tax law delays the mortgage application fee.
2-After the year 2013, it will be more difficult to qualify for a health insurance premium assistance tax credit. Health insurance exchange options are scheduled to be available under the Patient Protection and Affordable Care Act.upcoming premium assistance tax credit for qualified individual who obtain health insurance through a heals insurance exchange after 2013

1 comment: