Special rule provides more time to apply for employee certification

The VOW to Hire Heroes Act of 2011 made two changes to the Work Opportunity Tax Credit (WOTC): It added two new categories to the existing qualified veteran targeted group and made the WOTC available to certain tax-exempt employers as a credit against their share of Social Security tax. (For-profit employers claim the tax credit as a general business credit against their income tax.)

The act allows employers to claim the WOTC for employees certified as qualified veterans who begin work before January 1, 2013.

Under the new rules, employers can receive a credit of up to:

  • $2,400 for hiring veterans who have been unemployed for four weeks to six months
  • $5,600 for hiring veterans unemployed for more than six months
  • $9,600 for hiring veterans with service-connected disabilities who have been unemployed for more than six months

The amount of the credit depends on the number of hours the veteran works and his or her first-year wages.

Prescreening and Certification

Before claiming a credit, employers must obtain certification that an individual is a member of the targeted group.

Normally, eligible employers must file Form 8850, Pre-Screening Notice and Certification Request for the Work Opportunity Credit, with their state workforce agency within 28 days after the eligible worker begins work. But now, under a special rule, employers have until June 19, 2012, to complete and file this form for veterans hired on or after Nov. 22, 2011, and before May 22, 2012. The 28-day rule will again apply to eligible veterans hired on or after May 22, 2012.

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