Hiring Veterans: Taking Advantage of the WOTC ￼
Veterans often struggle to re-enter civilian life. However, finding a meaningful place in the workforce is pivotal in helping them acclimate to life outside of the military.
Employers recognize the benefits of bringing veterans onto their teams. Service members spend years learning the importance of duty, accountability, leadership, and a solid work ethic. These are invaluable in the workplace. Veterans bring these attitudes and skill sets with them, positively influencing the rest of your team and your company.
However, employers also benefit from hiring veterans in other ways as well. For example, the IRS and the VA have created incredible financial assistance programs to help incentivize employers to look outside their regular talent pools and consider hiring veterans who may otherwise struggle to find work.
The Work Opportunity Tax Credit
The Work Opportunity Tax Credit (WOTC), created in 1996, was designed not to increase jobs in the U.S. but to increase hiring awareness towards sometimes overlooked demographics. The WOTC has been extended frequently since its origin and has been recently extended through December 31, 2025. Veterans are among several targeted groups employers can hire to receive this credit.
The veteran must meet at least one of these qualifications for you to claim them on your tax return. They must be:
- Unemployed for at least four weeks and up to 6 months in the year prior to the hire date
- Disabled and unemployed for at least six months in the year prior to the hire date
- Discharged due to service-related disability in the year prior to the hire date
- Receiving SNAP benefits
The tax credit is applied to their wages and correlates to the hours they worked during their first year of employment. By hiring a qualified veteran, you can be credited 40% of up to $6,000 in their wages ($2400), provided they work at least 400 hours. If they work 120 to 399 hours, a 25% rate is applied instead. (In the case of some eligible veterans, up to $24,000 in wages can be claimed for a credit of $9,600. Ask your CPA if you can apply this in your business.)
In addition, they must be first-time hires and work for 27 consecutive weeks before you can claim the credit.
To Receive the Credit
Each eligible employee must be certified as part of one of the ten target groups recognized by the WOTC. To receive this, you must submit Form 8850 to your state workforce agency within 28 days of their first day. After obtaining certification, calculate the credit on Form 5884, which is part of their income tax return.
There are other incentives and supplemental benefits provided by the VA. These include the Veteran Readiness and Employment Program, the Special Employer Incentive Program, and the Non-Paid Work Experience Program.
Hiring a veteran is just one way to give back and say thank you! Take the time to check with your accountant to see how you can best take advantage of these programs.
At The Robert Joseph Group, we recognize that freedom is not free. We never want to take for granted the sacrifices that countless men and women have made so that we can live and work and raise our families in a free society. So, from all of us –Happy Veterans Day!