The Progressive Accountant - Tax
IRS Provides Guidance on Veterans Credit E-mail
Written by The Progressive Accountant   
Thursday, 09 February 2012 20:35

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irslogoThe Internal Revenue Service has released guidance and forms that employers can use to claim a newly-expanded tax credit for hiring veterans. Employers will also be given more time to file a certification form for employees hired on or after Nov. 22, 2011 and before 2012. Some tax-exempt organizations that hire unemployed veterans during that period are now also eligible for the credit.

The credit can be as high as $9,600 per veteran for for-profit employers and up to $6,240 for tax-exempt organizations. Credit size varies according to factors such as 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, Form 8850 must be filed with a state workforce agency within 28 days after an eligible person begins work. But now employers have until June 19 to complete and file the form. The 28-day rule goes back into effect for veterans hired on or after May 22.

 

The IRS also clarified and expanded guidance regarding the use of electronic signatures on Form 8850. The forms can be transmitted electronically and employers can also send them via fax, depending on formats accepted by state agencies. The Department of Labor is expected to issue further guidance to these agencies.

Businesses claim the credit on their income tax returns. The credit is first calculated on Form 5884 and then becomes a part of the general business credit claimed on Form 3800.



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