During an event at the Navy Yard in Washington, D.C., Obama emphasized his administration’s commitment to supporting the nation’s veterans and people who are serving in the U.S. military. “Having served and defended our nation, veterans are well-trained and highly skilled and will add value to any company,” Obama said in his remarks. “But today’s veterans face unique challenges when looking for jobs, and we must find ways to help them transition smoothly to civilian life.” The president is urging Congress to pass legislation that would create tax credits for employers that hire unemployed veterans. The proposal would offer businesses a maximum tax credit of $2,400 for unemployed veterans hired to fill temporary jobs and $4,800 for those hired to fill full-time permanent positions. According to a White House fact sheet, the president’s proposal would increase existing tax credits for employers that hire veterans who were wounded and disabled in the line of duty.
Unemployment rate in US is at an all time high at 9% however unemployment rate has been found to be even higher at 13% for veterans who have served in the military since 2001. The president said that the higher unemployment rate for veterans was disturbing and a clear indication that more must be done. Given below is a brief outline of the tax benefits – from the White House factsheet.
Returning Heroes and Wounded Warrior Tax Credits
Under the Recovery Act, employers who hired certain unemployed veterans were eligible for a tax credit of up to 40 percent of the first $6,000 of wages, for a maximum credit of $2,400. This credit expired at the end of 2010.
The Returning Heroes Tax Credit is a new hiring tax credit that will provide an incentive for firms to hire unemployed veterans.
* Short-term unemployed: A new credit of 40 percent of the first $6,000 of wages (up to $2,400) for employers who hire veterans who have been unemployed at least 4 weeks.
* Long-term unemployed: A new credit of 40 percent of the first $12,000 of wages (up to $4,800) for employers who hire veterans who have been unemployed longer than 6 months.
The Wounded Warrior Tax Credit will double the existing tax credit for long-term unemployed veterans with service-connected disabilities.
* Maintain the existing Work Opportunity Tax Credit for veterans with service-connected disabilities (currently the maximum is $4,800).
* A new credit of 40 percent of the first $24,000 of wages (up to $9,600) for firms that hire veterans with service-connected disabilities who have been unemployed longer than 6 months.
The president is pressing the private sector to create at least 100,000 jobs for veterans through 2013 to help lower the persistently high unemployment rate, which stood at 13.3 percent as of June. The White House estimates the cost of the tax-credit program at $120 million over two years, depending on how many employers hire veterans. About 1 million veterans are unemployed, according to the administration, including 260,000 former service members who joined the military after the Sept. 11 attacks in 2001.