More time allowed to claim tax credits for hiring veterans

Employers will have more time to file the required certification form for employees hired on or after Nov. 22, 2011, and before May 22, 2012.

The IRS has released the guidance and forms that employers can use to claim the newly expanded tax credit for hiring veterans.

The VOW to Hire Heroes Act of 2011, enacted Nov. 21, 2011, provides an expanded Work Opportunity Tax Credit to businesses that hire eligible unemployed veterans. And it makes the credit available to certain tax-exempt organizations.

The credit can be as high as $9,600 per veteran for for-profit employers or up to $6,240 for tax-exempt organizations. The amount of the credit depends on a number of factors, including the length of the veteran's unemployment before hire, hours a veteran works and the amount of first-year wages paid. Employers who hire veterans with service-related disabilities may be eligible for the maximum credit.

Normally, an eligible employer must file Form 8850 with the state work force agency within 28 days after the eligible worker begins work. But according to the new guidance, employers have until June 19, 2012, to complete and file this newly revised form for veterans hired on or after Nov. 22, 2011, and before May 22, 2012. The 28-day rule will also apply to eligible veterans hired on or after May 22, 2012.

To streamline the certification requirements, the IRS clarified and expanded upon earlier guidance to facilitate employers' use of electronic signatures when gathering the Form 8850 for transmission to state work force agencies. The guidance confirms that employers can transmit the form electronically and allows employers to transmit it by fax, subject to the ability of the state work force agencies to accept submissions in those formats.

The IRS expects the Department of Labor to issue further guidance to the state work force agencies to provide clarification.

Read more in Notice 2012-13.

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