“On January 1st, the The Returning Heroes and Wounded Warrior Tax Credits was allowed to expire, which benefits employers with a tax credit for hiring veterans and disabled veterans, was allowed to expire by Congress,” observed Norris Lozano, CEO of BusinessUS, a national small business lender. “Congress adjourned for winter recess without reauthorizing this important program.”
Veteran advocates across the country including Representative Bruce Braley, an Iowa Democrat, are pushing for a permanent extension of the credits.
Unlike a “tax deduction” or tax exemption, which equate to a tax reduction at the taxpayer’s taxable rate, a tax credit is a dollar-for-dollar reduction in taxes. A tax break for a $1,000 expense, at a taxable rate of 25%, for example, would reduce an employer’s taxes by $250, while a tax credit would be worth the full $1,000 for each Veteran hired.
The The Returning Heroes and Wounded Warrior Tax Credits program is valued at approximately $1 billion to employers. The Department of Labor reports that in 2013, more than 50,000 certifications were given to employers across the nation, netting more than $1 billion for employers on an annual basis.
According to this article, “The Returning Heroes and Wounded Warrior Tax Credit provides incentives of up to $5,600 for hiring qualified unemployed veterans, and the Wounded Warriors Tax Credit doubles the existing Work Opportunity Tax Credit for long-term unemployed veterans with service-connected disabilities to up to $9,600.
“The credits were extended at the end of 2012 into 2013, so there is a possibility that they will be extended again in 2014, though no word from Congress yet. However, there is still a chance that Congress could extend those tax credits in the next month or two.”